CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION Senate Bill No. 999Introduced by Senator Cortese(Coauthor: Assembly Member Low)February 14, 2022 An act to amend Sections 1374.72 and 1374.721 of the Health and Safety Code, and to amend Sections 10144.5 and 10144.52 of the Insurance Code, relating to health care coverage. LEGISLATIVE COUNSEL'S DIGESTSB 999, as introduced, Cortese. Health coverage: substance use disorders. Existing law, the Knox-Keene Health Care Service Plan Act of 1975, requires the Department of Managed Health Care to license and regulate health care service plans and makes a willful violation of the act a crime. Existing law also requires the Department of Insurance to regulate health insurers. Existing law requires a health care service plan or disability insurer, as specified, to base medical necessity determinations and the utilization review criteria the plan or insurer, and any entity acting on the plans or insurers behalf, applies to determine the medical necessity of health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders, on current generally accepted standards of mental health and substance use disorder care. Existing law defines generally accepted standards of mental health and substance use disorder care for these purposes to mean standards of care and clinical practice that are generally recognized by health care providers practicing in relevant clinical specialties, including as psychiatry, psychology, clinical sociology, addiction medicine and counseling, and behavioral health treatment, as specified. This bill would make that definition apply only to generally accepted standards of mental health care and would remove the reference to addiction medicine and counseling. The bill would define generally accepted standards of substance use disorder care to mean the patient placement criteria established by the American Society of Addiction Medicine. The bill would prohibit a health care service plan or disability insurer, or any entity acting on the plans or insurers behalf, from using any criteria in addition to the generally accepted standards of substance use disorder care to make a medical necessity determination, or for the utilization review criteria, for health care services and benefits for the diagnosis, prevention, and treatment of substance use disorders.This bill would require the utilization review process and utilization review criteria for mental health and substance use disorder care used by a health care service plan or a disability insurer, or an entity acting on the plans or insurers behalf, to be accredited by an independent, nonprofit organization on or before July 1, 2023, and would require the health care service plan or the insurer, or the entity acting on its behalf, to maintain an active accreditation while providing utilization review services. The bill would require the Director of the Department of Managed Health Care and the Insurance Commissioner, as applicable, to adopt rules to govern the selection of an independent, nonprofit organization to provide the accreditation services. Until those rules are adopted, the bill would require the director and the commissioner to designate the Utilization Review Accreditation Commission as the accrediting organization. The bill would require the accreditation to certify that the utilization review process meets specific criteria, including issuing utilization review decisions in a timely manner and providing for an internal appeals procedure. This bill would make conforming changes in related provisions.Because a violation of the provisions governing a health care service plan would be a crime, this bill would impose a state-mandated local program.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for a specified reason.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES Bill TextThe people of the State of California do enact as follows:SECTION 1. This act shall be known, and may be cited, as the California Residential Substance Use Disorder Treatment Patient Safety and Fairness Act.SEC. 2. The Legislature finds and declares all of the following: (a) The federal Affordable Care Act (ACA) includes mental health and addiction coverage as one of the 10 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.(b) When medically necessary mental health and substance use disorder care is not covered, individuals with mental health and substance use disorders often have their conditions worsen, ending up on Medicaid, in the criminal justice system, or on the streets, resulting in harm to individuals and communities, and higher costs to taxpayers.(c) In two court decisions, Harlick v. Blue Shield of California, 686 F.3d 699 (9th Cir. 2011), cert. denied, 133 S.Ct. 1492 (2013), and Rea v. Blue Shield of California, 226 Cal.App.4th 1209, 1227 (2014), the California Mental Health Parity Act was interpreted to require coverage of medically necessary residential treatment. (d) Coverage of intermediate levels of care such as residential treatment, which are essential components of the level of care continuum called for by nonprofit organizations, and clinical specialty associations such as the American Society of Addiction Medicine, are often denied through overly restrictive medical necessity determinations.SEC. 3. Section 1374.72 of the Health and Safety Code is amended to read:1374.72. (a) (1) Every health care service plan contract issued, amended, or renewed on or after January 1, 2021, that provides hospital, medical, or surgical coverage shall provide coverage for medically necessary treatment of mental health and substance use disorders, under the same terms and conditions applied to other medical conditions as specified in subdivision (c).(2) For purposes of this section, mental health and substance use disorders means a mental health condition or substance use disorder that falls under any of the diagnostic categories listed in the mental and behavioral disorders chapter of the most recent edition of the International Classification of Diseases or that is listed in the most recent version of the Diagnostic and Statistical Manual of Mental Disorders. Changes in terminology, organization, or classification of mental health and substance use disorders in future versions of the American Psychiatric Associations Diagnostic and Statistical Manual of Mental Disorders or the World Health Organizations International Statistical Classification of Diseases and Related Health Problems shall not affect the conditions covered by this section as long as a condition is commonly understood to be a mental health or substance use disorder by health care providers practicing in relevant clinical specialties.(3) (A) For purposes of this section, medically necessary treatment of a mental health or substance use disorder means a service or product addressing the specific needs of that patient, for the purpose of preventing, diagnosing, or treating an illness, injury, condition, or its symptoms, including minimizing the progression of that illness, injury, condition, or its symptoms, in a manner that is all of the following:(i) In accordance with the generally accepted standards of mental health and substance use disorder care.(ii) Clinically appropriate in terms of type, frequency, extent, site, and duration.(iii) Not primarily for the economic benefit of the health care service plan and subscribers or for the convenience of the patient, treating physician, or other health care provider.(B) This paragraph does not limit in any way the independent medical review rights of an enrollee or subscriber under this chapter.(4) For purposes of this section, health care provider means any of the following:(A) A person who is licensed under Division 2 (commencing with Section 500) of the Business and Professions Code.(B) An associate marriage and family therapist or marriage and family therapist trainee functioning pursuant to Section 4980.43.3 of the Business and Professions Code.(C) A qualified autism service provider or qualified autism service professional certified by a national entity pursuant to Section 10144.51 of the Insurance Code and Section 1374.73.(D) An associate clinical social worker functioning pursuant to Section 4996.23.2 of the Business and Professions Code.(E) An associate professional clinical counselor or professional clinical counselor trainee functioning pursuant to Section 4999.46.3 of the Business and Professions Code.(F) A registered psychologist, as described in Section 2909.5 of the Business and Professions Code.(G) A registered psychological assistant, as described in Section 2913 of the Business and Professions Code.(H) A psychology trainee or person supervised as set forth in Section 2910 or 2911 of, or subdivision (d) of Section 2914 of, the Business and Professions Code.(5) For purposes of this section, generally accepted standards of mental health and substance use disorder care has the same meaning means the generally accepted standards of mental health care and the generally accepted standards of substance use disorder care as defined in subparagraphs (A) and (B) of paragraph (1) of subdivision (f) of Section 1374.721.(6) A health care service plan shall not limit benefits or coverage for mental health and substance use disorders to short-term or acute treatment.(7) All medical necessity determinations by the health care service plan concerning service intensity, level of care placement, continued stay, and transfer or discharge of enrollees diagnosed with mental health and substance use disorders shall be conducted in accordance with the requirements of Section 1374.721. This paragraph does not deprive an enrollee of the other protections of this chapter, including, but not limited to, grievances, appeals, independent medical review, discharge, transfer, and continuity of care.(8) A health care service plan that authorizes a specific type of treatment by a provider pursuant to this section shall not rescind or modify the authorization after the provider renders the health care service in good faith and pursuant to this authorization for any reason, including, but not limited to, the plans subsequent rescission, cancellation, or modification of the enrollees or subscribers contract, or the plans subsequent determination that it did not make an accurate determination of the enrollees or subscribers eligibility. This section shall not be construed to expand or alter the benefits available to the enrollee or subscriber under a plan.(b) The benefits that shall be covered pursuant to this section shall include, but not be limited to, the following:(1) Basic health care services, as defined in subdivision (b) of Section 1345.(2) Intermediate services, including the full range of levels of care, including, but not limited to, residential treatment, partial hospitalization, and intensive outpatient treatment.(3) Prescription drugs, if the plan contract includes coverage for prescription drugs.(c) The terms and conditions applied to the benefits required by this section, that shall be applied equally to all benefits under the plan contract, shall include, but not be limited to, all of the following patient financial responsibilities:(1) Maximum annual and lifetime benefits, if not prohibited by applicable law.(2) Copayments and coinsurance.(3) Individual and family deductibles.(4) Out-of-pocket maximums.(d) If services for the medically necessary treatment of a mental health or substance use disorder are not available in network within the geographic and timely access standards set by law or regulation, the health care service plan shall arrange coverage to ensure the delivery of medically necessary out-of-network services and any medically necessary followup services that, to the maximum extent possible, meet those geographic and timely access standards. As used in this subdivision, to arrange coverage to ensure the delivery of medically necessary out-of-network services includes, but is not limited to, providing services to secure medically necessary out-of-network options that are available to the enrollee within geographic and timely access standards. The enrollee shall pay no more than the same cost sharing that the enrollee would pay for the same covered services received from an in-network provider.(e) This section shall not apply to contracts entered into pursuant to Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code, between the State Department of Health Care Services and a health care service plan for enrolled Medi-Cal beneficiaries.(f) (1) For the purpose of compliance with this section, a health care service plan may provide coverage for all or part of the mental health and substance use disorder services required by this section through a separate specialized health care service plan or mental health plan, and shall not be required to obtain an additional or specialized license for this purpose.(2) A health care service plan shall provide the mental health and substance use disorder coverage required by this section in its entire service area and in emergency situations as may be required by applicable laws and regulations. For purposes of this section, health care service plan contracts that provide benefits to enrollees through preferred provider contracting arrangements are not precluded from requiring enrollees who reside or work in geographic areas served by specialized health care service plans or mental health plans to secure all or part of their mental health services within those geographic areas served by specialized health care service plans or mental health plans, provided that all appropriate mental health or substance use disorder services are actually available within those geographic service areas within timeliness standards.(3) Notwithstanding any other law, in the provision of benefits required by this section, a health care service plan may utilize case management, network providers, utilization review techniques, prior authorization, copayments, or other cost sharing, provided that these practices are consistent with Section 1374.76 of this code, and Section 2052 of the Business and Professions Code.(g) This section shall not be construed to deny or restrict in any way the departments authority to ensure plan compliance with this chapter.(h) A health care service plan shall not limit benefits or coverage for medically necessary services on the basis that those services should be or could be covered by a public entitlement program, including, but not limited to, special education or an individualized education program, Medicaid, Medicare, Supplemental Security Income, or Social Security Disability Insurance, and shall not include or enforce a contract term that excludes otherwise covered benefits on the basis that those services should be or could be covered by a public entitlement program.(i) A health care service plan shall not adopt, impose, or enforce terms in its plan contracts or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.SEC. 4. Section 1374.721 of the Health and Safety Code is amended to read:1374.721. (a) (1) A health care service plan that provides hospital, medical, or surgical coverage shall base any medical necessity determination or the utilization review criteria that the plan, and any entity acting on the plans behalf, applies to determine the medical necessity of health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders on current generally accepted standards of mental health and substance use disorder care.(2) A health care service plan, and any entity acting on the plans behalf, shall not use any criteria in addition to the generally accepted standards of substance use disorder, as defined in subparagraph (B) of paragraph (1) of subdivision (f), to make a medical necessity determination, or for the utilization review criteria, for health care services and benefits for the diagnosis, prevention, and treatment of substance use disorders.(b) In conducting utilization review of all covered health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders conditions in children, adolescents, and adults, a health care service plan shall apply the criteria and guidelines set forth in the most recent versions of the treatment criteria developed by the nonprofit professional association for the relevant clinical specialty.(c) In conducting utilization review involving level of care placement decisions or any other patient care decisions that are within the scope of the sources specified in subdivision (b), a health care service plan shall not apply different, additional, conflicting, or more restrictive utilization review criteria than the criteria and guidelines set forth in those sources. This subdivision does not prohibit a health care service plan from applying utilization review criteria to health care services and benefits for mental health and substance use disorders conditions that meet either of the following criteria:(1) Are outside the scope of the criteria and guidelines set forth in the sources specified in subdivision (b), provided the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).(2) Relate to advancements in technology or types of care that are not covered in the most recent versions of the sources specified in subdivision (b), provided that the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).(d) If a health care service plan purchases or licenses utilization review criteria pursuant to paragraph (1) or (2) of subdivision (c), the plan shall verify and document before use that the criteria were developed in accordance with paragraph (1) of subdivision (a).(e) To ensure the proper use of the criteria described in subdivision subdivisions (a) and (b), every health care service plan shall do all of the following:(1) Sponsor a formal education program by nonprofit clinical specialty associations associations, including, but not limited to, the American Society of Addiction Medicine, to educate the health care service plans staff, including any third parties contracted with the health care service plan to review claims, conduct utilization reviews, or make medical necessity determinations about the clinical review criteria.(2) Make the education program available to other stakeholders, including the health care service plans participating providers and covered lives. Participating providers shall not be required to participate in the education program.(3) Provide, at no cost, the clinical review criteria and any training material or resources to providers and health care service plan enrollees.(4) Track, identify, and analyze how the clinical review criteria are used to certify care, deny care, and support the appeals process.(5) Conduct interrater reliability testing to ensure consistency in utilization review decisionmaking covering how medical necessity decisions are made. This assessment shall cover all aspects of utilization review as defined in paragraph (3) of subdivision (f).(6) Run interrater reliability reports about how the clinical guidelines are used in conjunction with the utilization management process and parity compliance activities.(7) Achieve interrater reliability pass rates of at least 90 percent and, if this threshold is not met, immediately provide for the remediation of poor interrater reliability and interrater reliability testing for all new staff before they can conduct utilization review without supervision.(f) The following definitions apply for purposes of this section:(1) (A) Generally accepted standards of mental health and substance use disorder care means standards of care and clinical practice that are generally recognized by health care providers practicing in relevant clinical specialties such as specialties, including psychiatry, psychology, clinical sociology, addiction medicine and counseling, and behavioral health treatment pursuant to Section 1374.73. Valid, evidence-based sources establishing generally accepted standards of mental health and substance use disorder care include peer-reviewed scientific studies and medical literature, clinical practice guidelines and recommendations of nonprofit health care provider professional associations, specialty societies and federal government agencies, and drug labeling approved by the United States Food and Drug Administration.(B) Generally accepted standards of substance use disorder care means the patient placement criteria established by the American Society of Addiction Medicine.(2) Mental health and substance use disorders has the same meaning as defined in paragraph (2) of subdivision (a) of Section 1374.72.(3) Utilization review means either of the following:(A) Prospectively, retrospectively, or concurrently reviewing and approving, modifying, delaying, or denying, based in whole or in part on medical necessity, requests by health care providers, enrollees, or their authorized representatives for coverage of health care services prior to, retrospectively or concurrent with the provision of health care services to enrollees.(B) Evaluating the medical necessity, appropriateness, level of care, service intensity, efficacy, or efficiency of health care services, benefits, procedures, or settings, under any circumstances, to determine whether a health care service or benefit subject to a medical necessity coverage requirement in a health care service plan contract is covered as medically necessary for an enrollee.(4) Utilization review criteria means any criteria, standards, protocols, or guidelines used by a health care service plan to conduct utilization review.(g) This section applies to all health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders covered by a health care service plan contract, including prescription drugs.(h) This section applies to a health care service plan that conducts utilization review as defined in this section, and any entity or contracting provider that performs utilization review or utilization management functions on behalf of a health care service plan.(i) The director may assess administrative penalties for violations of this section as provided for in Section 1368.04, in addition to any other remedies permitted by law.(j) A health care service plan shall not adopt, impose, or enforce terms in its plan contracts or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.(k) (1) The utilization review process and utilization review criteria for mental health and substance use disorder care used by a health care service plan, or an entity acting on its behalf, shall be accredited by an independent, nonprofit organization on or before July 1, 2023, and the health care service plan, or the entity acting on its behalf, shall maintain an active accreditation while providing utilization review services.(2) The director shall adopt rules to govern the selection of an independent, nonprofit organization to provide the accreditation services. Until those rules are adopted, the director shall designate the Utilization Review Accreditation Commission as the accrediting organization.(3) The accreditation shall certify that the utilization review process includes specific criteria, including, but not limited to, all of the following:(A) Issuing utilization review decisions in a timely manner.(B) The appropriate scope of medical material used in issuing a utilization review decision.(C) Conducting peer-to-peer consultation.(D) Providing for an internal appeals procedure.(E) Implementing a policy that prohibits physicians, surgeons, and other providers from receiving an incentive based on the utilization review decision.(4) The director shall adopt rules that require additional specific criteria for accrediting a utilization review process, including, but not limited to, all of the following:(A) A physician and surgeon providing utilization review services shall hold an unrestricted license to practice medicine in this state issued pursuant to Section 2050 of the Business and Professions Code or issued by the Osteopathic Medical Board of California under the Osteopathic Act.(B) The health care service plan, or an entity acting on the plans behalf, shall maintain telephone access during California business hours for physicians and surgeons to request authorization for mental health and substance use disorder care and conduct peer-to-peer discussions regarding issues, including the appropriateness of a requested treatment, modification of a treatment request, or obtaining additional information needed to make a medical necessity determination.(C) The health care service plan, or an entity acting on the plans behalf, shall disclose any financial conflict of interest between the health care service plan, or the entity acting on the plans behalf, and any other contracting entity that may impact the medical necessity determination.(D) A physician and surgeon providing utilization review services shall disclose to the treating provider the total number of reviews conducted and the percentage of services approved and denied.(l) If a utilization review request or appeal is filed regarding the medical necessity of a substance use disorder treatment or service, there is a rebuttable presumption that the treatment or service recommended by a physician and surgeon credentialed by the American Society of Addiction Medicine or the California Society of Addiction Medicine is medically necessary.(k)(m) This section does not apply to contracts entered into pursuant to Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code, between the State Department of Health Care Services and a health care service plan for enrolled Medi-Cal beneficiaries.SEC. 5. Section 10144.5 of the Insurance Code is amended to read:10144.5. (a) (1) Every disability insurance policy issued, amended, or renewed on or after January 1, 2021, that provides hospital, medical, or surgical coverage shall provide coverage for medically necessary treatment of mental health and substance use disorders, under the same terms and conditions applied to other medical conditions as specified in subdivision (c).(2) For purposes of this section, mental health and substance use disorders means a mental health condition or substance use disorder that falls under any of the diagnostic categories listed in the mental and behavioral disorders chapter of the most recent edition of the World Health Organizations International Statistical Classification of Diseases and Related Health Problems, or that is listed in the most recent version of the American Psychiatric Associations Diagnostic and Statistical Manual of Mental Disorders. Changes in terminology, organization, or classification of mental health and substance use disorders in future versions of the American Psychiatric Associations Diagnostic and Statistical Manual of Mental Disorders or the World Health Organizations International Statistical Classification of Diseases and Related Health Problems shall not affect the conditions covered by this section as long as a condition is commonly understood to be a mental health or substance use disorder by health care providers practicing in relevant clinical specialties.(3) (A) For purposes of this section, medically necessary treatment of a mental health or substance use disorder means a service or product addressing the specific needs of that patient, for the purpose of preventing, diagnosing, or treating an illness, injury, condition, or its symptoms, including minimizing the progression of an illness, injury, condition, or its symptoms, in a manner that is all of the following:(i) In accordance with the generally accepted standards of mental health and substance use disorder care.(ii) Clinically appropriate in terms of type, frequency, extent, site, and duration.(iii) Not primarily for the economic benefit of the disability insurer and insureds or for the convenience of the patient, treating physician, or other health care provider.(B) This paragraph does not limit in any way the independent medical review rights of an insured or policyholder under this chapter.(4) Health care provider means any of the following:(A) A person who is licensed under Division 2 (commencing with Section 500) of the Business and Professions Code.(B) An associate marriage and family therapist or marriage and family therapist trainee functioning pursuant to Section 4980.43.3 of the Business and Professions Code.(C) A qualified autism service provider or qualified autism service professional certified by a national entity pursuant to Section 1374.73 of the Health and Safety Code and Section 10144.51.(D) An associate clinical social worker functioning pursuant to Section 4996.23.2 of the Business and Professions Code.(E) An associate professional clinical counselor or professional clinical counselor trainee functioning pursuant to Section 4999.46.3 of the Business and Professions Code.(F) A registered psychologist, as described in Section 2909.5 of the Business and Professions Code.(G) A registered psychological assistant, as described in Section 2913 of the Business and Professions Code.(H) A psychology trainee or person supervised as set forth in Section 2910 or 2911 of, or subdivision (d) of Section 2914 of, the Business and Professions Code.(5) For purposes of this section, generally accepted standards of mental health and substance use disorder care has the same meaning means the generally accepted standards of mental health care and the generally accepted standards of substance use disorder care as defined in subparagraphs (A) and (B) of paragraph (1) of subdivision (f) of Section 10144.52.(6) A disability insurer shall not limit benefits or coverage for mental health and substance use disorders to short-term or acute treatment.(7) All medical necessity determinations made by the disability insurer concerning service intensity, level of care placement, continued stay, and transfer or discharge of insureds diagnosed with mental health and substance use disorders shall be conducted in accordance with the requirements of Section 10144.52.(8) A disability insurer that authorizes a specific type of treatment by a provider pursuant to this section shall not rescind or modify the authorization after the provider renders the health care service in good faith and pursuant to this authorization for any reason, including, but not limited to, the insurers subsequent rescission, cancellation, or modification of the insureds or policyholders contract, or the insurers subsequent determination that it did not make an accurate determination of the insureds or policyholders eligibility. This section shall not be construed to expand or alter the benefits available to the insured or policyholder under an insurance policy.(b) The benefits that shall be covered pursuant to this section shall include, but not be limited to, the following:(1) Basic health care services, as defined in subdivision (b) of Section 1345 of the Health and Safety Code.(2) Intermediate services, including the full range of levels of care, including, but not limited to, residential treatment, partial hospitalization, and intensive outpatient treatment.(3) Prescription drugs, if the policy includes coverage for prescription drugs.(c) The terms and conditions applied to the benefits required by this section, that shall be applied equally to all benefits under the disability insurance policy shall include, but not be limited to, all of the following patient financial responsibilities:(1) Maximum and annual lifetime benefits, if not prohibited by applicable law.(2) Copayments and coinsurance.(3) Individual and family deductibles.(4) Out-of-pocket maximums.(d) If services for the medically necessary treatment of a mental health or substance use disorder are not available in network within the geographic and timely access standards set by law or regulation, the disability insurer shall arrange coverage to ensure the delivery of medically necessary out-of-network services and any medically necessary followup services that, to the maximum extent possible, meet those geographic and timely access standards. As used in this subdivision, to arrange coverage to ensure the delivery of medically necessary out-of-network services includes, but is not limited to, providing services to secure medically necessary out-of-network options that are available to the insured within geographic and timely access standards. The insured shall pay no more than the same cost sharing that the insured would pay for the same covered services received from an in-network provider.(e) This section shall not apply to accident-only, specified disease, hospital indemnity, Medicare supplement, dental-only, or vision-only insurance policies.(f) (1) For the purpose of compliance with this section, a disability insurer may provide coverage for all or part of the mental health and substance use disorder services required by this section through a separate specialized health insurance policy or mental health policy. This paragraph shall not apply to policies that are subject to Section 10112.27.(2) A disability insurer shall provide the mental health and substance use disorder coverage required by this section in its entire service area and in emergency situations as may be required by applicable laws and regulations. For purposes of this section, disability insurance policies that provide benefits to insureds through preferred provider contracting arrangements are not precluded from requiring insureds who reside or work in geographic areas served by specialized health insurance policies or mental health insurance policies to secure all or part of their mental health services within those geographic areas served by specialized health insurance policies or mental health insurance policies, provided that all appropriate mental health or substance use disorder services are actually available within those geographic service areas within timeliness standards.(3) Notwithstanding any other law, in the provision of benefits required by this section, a disability insurer may utilize case management, network providers, utilization review techniques, prior authorization, copayments, or other cost sharing, provided that these practices are consistent with Section 10144.4 of this code, and Section 2052 of the Business and Professions Code.(g) This section shall not be construed to deny or restrict in any way the departments authority to ensure a disability insurers compliance with this code.(h) A disability insurer shall not limit benefits or coverage for medically necessary services on the basis that those services should be or could be covered by a public entitlement program, including, but not limited to, special education or an individualized education program, Medicaid, Medicare, Supplemental Security Income, or Social Security Disability Insurance, and shall not include or enforce a contract term that excludes otherwise covered benefits on the basis that those services should be or could be covered by a public entitlement program.(i) A disability insurer shall not adopt, impose, or enforce terms in its policies or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.(j) If the commissioner determines that a disability insurer has violated this section, the commissioner may, after appropriate notice and opportunity for hearing in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), by order, assess a civil penalty not to exceed five thousand dollars ($5,000) for each violation, or, if a violation was willful, a civil penalty not to exceed ten thousand dollars ($10,000) for each violation.SEC. 6. Section 10144.52 of the Insurance Code is amended to read:10144.52. (a) (1) A disability insurer that provides hospital, medical, or surgical coverage shall base any medical necessity determination or the utilization review criteria that the insurer, and any entity acting on the insurers behalf, applies to determine the medical necessity of health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders on current generally accepted standards of mental health and substance use disorder care.(2) A disability insurer, and any entity acting on the insurers behalf, shall not use any criteria in addition to the generally accepted standards of substance use disorder, as defined in subparagraph (B) of paragraph (1) of subdivision (f), to make a medical necessity determination, or for the utilization review criteria, for health care services and benefits for the diagnosis, prevention, and treatment of substance use disorders.(b) In conducting utilization review of all covered health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders conditions in children, adolescents, and adults, a disability insurer shall apply the criteria and guidelines set forth in the most recent versions of the treatment criteria developed by the nonprofit professional association for the relevant clinical specialty.(c) In conducting utilization review involving level of care placement decisions or any other patient care decisions that are within the scope of the sources specified in subdivision (b), a disability insurer shall not apply different, additional, conflicting, or more restrictive utilization review criteria than the criteria and guidelines set forth in those sources. This subdivision does not prohibit a disability insurer from applying utilization review criteria to health care services and benefits for mental health and substance use disorders conditions that meet either of the following criteria:(1) Are outside the scope of the criteria and guidelines set forth in the sources specified in subdivision (b), provided the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).(2) Relate to advancements in technology or types of care that are not covered in the most recent versions of the sources specified in subdivision (b), provided that the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).(d) If a disability insurer purchases or licenses utilization review criteria pursuant to paragraph (1) or (2) of subdivision (c), the insurer shall verify and document before use that the criteria were developed in accordance with paragraph (1) of subdivision (a).(e) To ensure the proper use of the criteria described in subdivision subdivisions (a) and (b), every disability insurer shall do all of the following:(1) Sponsor a formal education program by nonprofit clinical specialty associations associations, including, but not limited to, the American Society of Addiction Medicine, to educate the disability insurers staff, including any third parties contracted with the disability insurer to review claims, conduct utilization reviews, or make medical necessity determinations about the clinical review criteria.(2) Make the education program available to other stakeholders, including the insurers participating providers and covered lives.(3) Provide, at no cost, the clinical review criteria and any training material or resources to providers and insured patients.(4) Track, identify, and analyze how the clinical review criteria are used to certify care, deny care, and support the appeals process.(5) Conduct interrater reliability testing to ensure consistency in utilization review decisionmaking covering how medical necessity decisions are made. This assessment shall cover all aspects of utilization review as defined in paragraph (3) of subdivision (f).(6) Run interrater reliability reports about how the clinical guidelines are used in conjunction with the utilization management process and parity compliance activities.(7) Achieve interrater reliability pass rates of at least 90 percent and, if this threshold is not met, immediately provide for the remediation of poor interrater reliability and interrater reliability testing for all new staff before they can conduct utilization review without supervision.(f) The following definitions apply for purposes of this section:(1) (A) Generally accepted standards of mental health and substance use disorder care means standards of care and clinical practice that are generally recognized by health care providers practicing in relevant clinical specialties such as specialties, including psychiatry, psychology, clinical sociology, addiction medicine and counseling, and behavioral health treatment pursuant to Section 10144.51. Valid, evidence-based sources establishing generally accepted standards of mental health and substance use disorder care include peer-reviewed scientific studies and medical literature, clinical practice guidelines and recommendations of nonprofit health care provider professional associations, specialty societies and federal government agencies, and drug labeling approved by the United States Food and Drug Administration.(B) Generally accepted standards of substance use disorder care means the patient placement criteria established by the American Society of Addiction Medicine.(2) Mental health and substance use disorders has the same meaning as defined in paragraph (2) of subdivision (a) of Section 10144.5.(3) Utilization review means either of the following:(A) Prospectively, retrospectively, or concurrently reviewing and approving, modifying, delaying, or denying, based in whole or in part on medical necessity, requests by health care providers, insureds, or their authorized representatives for coverage of health care services prior to, retrospectively or concurrent with the provision of health care services to insureds.(B) Evaluating the medical necessity, appropriateness, level of care, service intensity, efficacy, or efficiency of health care services, benefits, procedures, or settings, under any circumstances, to determine whether a health care service or benefit subject to a medical necessity coverage requirement in a disability insurance policy is covered as medically necessary for an insured.(4) Utilization review criteria means any criteria, standards, protocols, or guidelines used by a disability insurer to conduct utilization review.(g) This section applies to all health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders covered by a disability insurance policy, including prescription drugs.(h) This section applies to a disability insurer that covers hospital, medical, or surgical expenses and conducts utilization review as defined in this section, and any entity or contracting provider that performs utilization review or utilization management functions on an insurers behalf.(i) If the commissioner determines that a disability insurer has violated this section, the commissioner may, after appropriate notice and opportunity for hearing in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), by order, assess a civil penalty not to exceed five thousand dollars ($5,000) for each violation, or, if a violation was willful, a civil penalty not to exceed ten thousand dollars ($10,000) for each violation.(j) A disability insurer shall not adopt, impose, or enforce terms in its policies or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.(k) (1) The utilization review process and utilization review criteria for mental health and substance use disorder care used by a disability insurer, or an entity acting on its behalf, shall be accredited by an independent, nonprofit organization on or before July 1, 2023, and the disability insurer, or the entity acting on its behalf, shall maintain an active accreditation while providing utilization review services.(2) The commissioner shall adopt rules to govern the selection of an independent, nonprofit organization to provide the accreditation services. Until those rules are adopted, the commissioner shall designate the Utilization Review Accreditation Commission as the accrediting organization.(3) The accreditation shall certify that the utilization review process includes specific criteria, including, but not limited to, all of the following:(A) Issuing utilization review decisions in a timely manner.(B) The appropriate scope of medical material used in issuing a utilization review decision.(C) Conducting peer-to-peer consultation.(D) Providing for an internal appeals procedure.(E) Implementing a policy that prohibits physicians, surgeons, and other providers from receiving an incentive based on the utilization review decision.(4) The commissioner shall adopt rules that require additional specific criteria for accrediting a utilization review process, including, but not limited to, all of the following:(A) A physician and surgeon providing utilization review services shall hold an unrestricted license to practice medicine in this state issued pursuant to Section 2050 of the Business and Professions Code or issued by the Osteopathic Medical Board of California under the Osteopathic Act.(B) The disability insurer, or an entity acting on the insurers behalf, shall maintain telephone access during California business hours for physicians and surgeons to request authorization for mental health and substance use disorder care and conduct peer-to-peer discussions regarding issues, including the appropriateness of a requested treatment, modification of a treatment request, or obtaining additional information needed to make a medical necessity determination.(C) The disability insurer, or an entity acting on the insurers behalf, shall disclose any financial conflict of interest between the disability insurer, or the entity acting on the insurers behalf, and any other contracting entity that may impact the medical necessity determination.(D) A physician and surgeon providing utilization review services shall disclose to the treating provider the total number of reviews conducted and the percentage of services approved and denied.(l) If a utilization review request or appeal is filed regarding the medical necessity of a substance use disorder treatment or service, there is a rebuttable presumption that the treatment or service recommended by a physician and surgeon credentialed by the American Society of Addiction Medicine or the California Society of Addiction Medicine is medically necessary.(k)(m) This section does not apply to accident-only, specified disease, hospital indemnity, Medicare supplement, dental-only, or vision-only insurance policies.SEC. 7. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION Senate Bill No. 999Introduced by Senator Cortese(Coauthor: Assembly Member Low)February 14, 2022 An act to amend Sections 1374.72 and 1374.721 of the Health and Safety Code, and to amend Sections 10144.5 and 10144.52 of the Insurance Code, relating to health care coverage. LEGISLATIVE COUNSEL'S DIGESTSB 999, as introduced, Cortese. Health coverage: substance use disorders. Existing law, the Knox-Keene Health Care Service Plan Act of 1975, requires the Department of Managed Health Care to license and regulate health care service plans and makes a willful violation of the act a crime. Existing law also requires the Department of Insurance to regulate health insurers. Existing law requires a health care service plan or disability insurer, as specified, to base medical necessity determinations and the utilization review criteria the plan or insurer, and any entity acting on the plans or insurers behalf, applies to determine the medical necessity of health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders, on current generally accepted standards of mental health and substance use disorder care. Existing law defines generally accepted standards of mental health and substance use disorder care for these purposes to mean standards of care and clinical practice that are generally recognized by health care providers practicing in relevant clinical specialties, including as psychiatry, psychology, clinical sociology, addiction medicine and counseling, and behavioral health treatment, as specified. This bill would make that definition apply only to generally accepted standards of mental health care and would remove the reference to addiction medicine and counseling. The bill would define generally accepted standards of substance use disorder care to mean the patient placement criteria established by the American Society of Addiction Medicine. The bill would prohibit a health care service plan or disability insurer, or any entity acting on the plans or insurers behalf, from using any criteria in addition to the generally accepted standards of substance use disorder care to make a medical necessity determination, or for the utilization review criteria, for health care services and benefits for the diagnosis, prevention, and treatment of substance use disorders.This bill would require the utilization review process and utilization review criteria for mental health and substance use disorder care used by a health care service plan or a disability insurer, or an entity acting on the plans or insurers behalf, to be accredited by an independent, nonprofit organization on or before July 1, 2023, and would require the health care service plan or the insurer, or the entity acting on its behalf, to maintain an active accreditation while providing utilization review services. The bill would require the Director of the Department of Managed Health Care and the Insurance Commissioner, as applicable, to adopt rules to govern the selection of an independent, nonprofit organization to provide the accreditation services. Until those rules are adopted, the bill would require the director and the commissioner to designate the Utilization Review Accreditation Commission as the accrediting organization. The bill would require the accreditation to certify that the utilization review process meets specific criteria, including issuing utilization review decisions in a timely manner and providing for an internal appeals procedure. This bill would make conforming changes in related provisions.Because a violation of the provisions governing a health care service plan would be a crime, this bill would impose a state-mandated local program.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for a specified reason.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES
CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION
Senate Bill
No. 999
Introduced by Senator Cortese(Coauthor: Assembly Member Low)February 14, 2022
Introduced by Senator Cortese(Coauthor: Assembly Member Low)
February 14, 2022
An act to amend Sections 1374.72 and 1374.721 of the Health and Safety Code, and to amend Sections 10144.5 and 10144.52 of the Insurance Code, relating to health care coverage.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
SB 999, as introduced, Cortese. Health coverage: substance use disorders.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, requires the Department of Managed Health Care to license and regulate health care service plans and makes a willful violation of the act a crime. Existing law also requires the Department of Insurance to regulate health insurers. Existing law requires a health care service plan or disability insurer, as specified, to base medical necessity determinations and the utilization review criteria the plan or insurer, and any entity acting on the plans or insurers behalf, applies to determine the medical necessity of health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders, on current generally accepted standards of mental health and substance use disorder care. Existing law defines generally accepted standards of mental health and substance use disorder care for these purposes to mean standards of care and clinical practice that are generally recognized by health care providers practicing in relevant clinical specialties, including as psychiatry, psychology, clinical sociology, addiction medicine and counseling, and behavioral health treatment, as specified. This bill would make that definition apply only to generally accepted standards of mental health care and would remove the reference to addiction medicine and counseling. The bill would define generally accepted standards of substance use disorder care to mean the patient placement criteria established by the American Society of Addiction Medicine. The bill would prohibit a health care service plan or disability insurer, or any entity acting on the plans or insurers behalf, from using any criteria in addition to the generally accepted standards of substance use disorder care to make a medical necessity determination, or for the utilization review criteria, for health care services and benefits for the diagnosis, prevention, and treatment of substance use disorders.This bill would require the utilization review process and utilization review criteria for mental health and substance use disorder care used by a health care service plan or a disability insurer, or an entity acting on the plans or insurers behalf, to be accredited by an independent, nonprofit organization on or before July 1, 2023, and would require the health care service plan or the insurer, or the entity acting on its behalf, to maintain an active accreditation while providing utilization review services. The bill would require the Director of the Department of Managed Health Care and the Insurance Commissioner, as applicable, to adopt rules to govern the selection of an independent, nonprofit organization to provide the accreditation services. Until those rules are adopted, the bill would require the director and the commissioner to designate the Utilization Review Accreditation Commission as the accrediting organization. The bill would require the accreditation to certify that the utilization review process meets specific criteria, including issuing utilization review decisions in a timely manner and providing for an internal appeals procedure. This bill would make conforming changes in related provisions.Because a violation of the provisions governing a health care service plan would be a crime, this bill would impose a state-mandated local program.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, requires the Department of Managed Health Care to license and regulate health care service plans and makes a willful violation of the act a crime. Existing law also requires the Department of Insurance to regulate health insurers. Existing law requires a health care service plan or disability insurer, as specified, to base medical necessity determinations and the utilization review criteria the plan or insurer, and any entity acting on the plans or insurers behalf, applies to determine the medical necessity of health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders, on current generally accepted standards of mental health and substance use disorder care. Existing law defines generally accepted standards of mental health and substance use disorder care for these purposes to mean standards of care and clinical practice that are generally recognized by health care providers practicing in relevant clinical specialties, including as psychiatry, psychology, clinical sociology, addiction medicine and counseling, and behavioral health treatment, as specified.
This bill would make that definition apply only to generally accepted standards of mental health care and would remove the reference to addiction medicine and counseling. The bill would define generally accepted standards of substance use disorder care to mean the patient placement criteria established by the American Society of Addiction Medicine. The bill would prohibit a health care service plan or disability insurer, or any entity acting on the plans or insurers behalf, from using any criteria in addition to the generally accepted standards of substance use disorder care to make a medical necessity determination, or for the utilization review criteria, for health care services and benefits for the diagnosis, prevention, and treatment of substance use disorders.
This bill would require the utilization review process and utilization review criteria for mental health and substance use disorder care used by a health care service plan or a disability insurer, or an entity acting on the plans or insurers behalf, to be accredited by an independent, nonprofit organization on or before July 1, 2023, and would require the health care service plan or the insurer, or the entity acting on its behalf, to maintain an active accreditation while providing utilization review services. The bill would require the Director of the Department of Managed Health Care and the Insurance Commissioner, as applicable, to adopt rules to govern the selection of an independent, nonprofit organization to provide the accreditation services. Until those rules are adopted, the bill would require the director and the commissioner to designate the Utilization Review Accreditation Commission as the accrediting organization. The bill would require the accreditation to certify that the utilization review process meets specific criteria, including issuing utilization review decisions in a timely manner and providing for an internal appeals procedure.
This bill would make conforming changes in related provisions.
Because a violation of the provisions governing a health care service plan would be a crime, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
## Digest Key
## Bill Text
The people of the State of California do enact as follows:SECTION 1. This act shall be known, and may be cited, as the California Residential Substance Use Disorder Treatment Patient Safety and Fairness Act.SEC. 2. The Legislature finds and declares all of the following: (a) The federal Affordable Care Act (ACA) includes mental health and addiction coverage as one of the 10 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.(b) When medically necessary mental health and substance use disorder care is not covered, individuals with mental health and substance use disorders often have their conditions worsen, ending up on Medicaid, in the criminal justice system, or on the streets, resulting in harm to individuals and communities, and higher costs to taxpayers.(c) In two court decisions, Harlick v. Blue Shield of California, 686 F.3d 699 (9th Cir. 2011), cert. denied, 133 S.Ct. 1492 (2013), and Rea v. Blue Shield of California, 226 Cal.App.4th 1209, 1227 (2014), the California Mental Health Parity Act was interpreted to require coverage of medically necessary residential treatment. (d) Coverage of intermediate levels of care such as residential treatment, which are essential components of the level of care continuum called for by nonprofit organizations, and clinical specialty associations such as the American Society of Addiction Medicine, are often denied through overly restrictive medical necessity determinations.SEC. 3. Section 1374.72 of the Health and Safety Code is amended to read:1374.72. (a) (1) Every health care service plan contract issued, amended, or renewed on or after January 1, 2021, that provides hospital, medical, or surgical coverage shall provide coverage for medically necessary treatment of mental health and substance use disorders, under the same terms and conditions applied to other medical conditions as specified in subdivision (c).(2) For purposes of this section, mental health and substance use disorders means a mental health condition or substance use disorder that falls under any of the diagnostic categories listed in the mental and behavioral disorders chapter of the most recent edition of the International Classification of Diseases or that is listed in the most recent version of the Diagnostic and Statistical Manual of Mental Disorders. Changes in terminology, organization, or classification of mental health and substance use disorders in future versions of the American Psychiatric Associations Diagnostic and Statistical Manual of Mental Disorders or the World Health Organizations International Statistical Classification of Diseases and Related Health Problems shall not affect the conditions covered by this section as long as a condition is commonly understood to be a mental health or substance use disorder by health care providers practicing in relevant clinical specialties.(3) (A) For purposes of this section, medically necessary treatment of a mental health or substance use disorder means a service or product addressing the specific needs of that patient, for the purpose of preventing, diagnosing, or treating an illness, injury, condition, or its symptoms, including minimizing the progression of that illness, injury, condition, or its symptoms, in a manner that is all of the following:(i) In accordance with the generally accepted standards of mental health and substance use disorder care.(ii) Clinically appropriate in terms of type, frequency, extent, site, and duration.(iii) Not primarily for the economic benefit of the health care service plan and subscribers or for the convenience of the patient, treating physician, or other health care provider.(B) This paragraph does not limit in any way the independent medical review rights of an enrollee or subscriber under this chapter.(4) For purposes of this section, health care provider means any of the following:(A) A person who is licensed under Division 2 (commencing with Section 500) of the Business and Professions Code.(B) An associate marriage and family therapist or marriage and family therapist trainee functioning pursuant to Section 4980.43.3 of the Business and Professions Code.(C) A qualified autism service provider or qualified autism service professional certified by a national entity pursuant to Section 10144.51 of the Insurance Code and Section 1374.73.(D) An associate clinical social worker functioning pursuant to Section 4996.23.2 of the Business and Professions Code.(E) An associate professional clinical counselor or professional clinical counselor trainee functioning pursuant to Section 4999.46.3 of the Business and Professions Code.(F) A registered psychologist, as described in Section 2909.5 of the Business and Professions Code.(G) A registered psychological assistant, as described in Section 2913 of the Business and Professions Code.(H) A psychology trainee or person supervised as set forth in Section 2910 or 2911 of, or subdivision (d) of Section 2914 of, the Business and Professions Code.(5) For purposes of this section, generally accepted standards of mental health and substance use disorder care has the same meaning means the generally accepted standards of mental health care and the generally accepted standards of substance use disorder care as defined in subparagraphs (A) and (B) of paragraph (1) of subdivision (f) of Section 1374.721.(6) A health care service plan shall not limit benefits or coverage for mental health and substance use disorders to short-term or acute treatment.(7) All medical necessity determinations by the health care service plan concerning service intensity, level of care placement, continued stay, and transfer or discharge of enrollees diagnosed with mental health and substance use disorders shall be conducted in accordance with the requirements of Section 1374.721. This paragraph does not deprive an enrollee of the other protections of this chapter, including, but not limited to, grievances, appeals, independent medical review, discharge, transfer, and continuity of care.(8) A health care service plan that authorizes a specific type of treatment by a provider pursuant to this section shall not rescind or modify the authorization after the provider renders the health care service in good faith and pursuant to this authorization for any reason, including, but not limited to, the plans subsequent rescission, cancellation, or modification of the enrollees or subscribers contract, or the plans subsequent determination that it did not make an accurate determination of the enrollees or subscribers eligibility. This section shall not be construed to expand or alter the benefits available to the enrollee or subscriber under a plan.(b) The benefits that shall be covered pursuant to this section shall include, but not be limited to, the following:(1) Basic health care services, as defined in subdivision (b) of Section 1345.(2) Intermediate services, including the full range of levels of care, including, but not limited to, residential treatment, partial hospitalization, and intensive outpatient treatment.(3) Prescription drugs, if the plan contract includes coverage for prescription drugs.(c) The terms and conditions applied to the benefits required by this section, that shall be applied equally to all benefits under the plan contract, shall include, but not be limited to, all of the following patient financial responsibilities:(1) Maximum annual and lifetime benefits, if not prohibited by applicable law.(2) Copayments and coinsurance.(3) Individual and family deductibles.(4) Out-of-pocket maximums.(d) If services for the medically necessary treatment of a mental health or substance use disorder are not available in network within the geographic and timely access standards set by law or regulation, the health care service plan shall arrange coverage to ensure the delivery of medically necessary out-of-network services and any medically necessary followup services that, to the maximum extent possible, meet those geographic and timely access standards. As used in this subdivision, to arrange coverage to ensure the delivery of medically necessary out-of-network services includes, but is not limited to, providing services to secure medically necessary out-of-network options that are available to the enrollee within geographic and timely access standards. The enrollee shall pay no more than the same cost sharing that the enrollee would pay for the same covered services received from an in-network provider.(e) This section shall not apply to contracts entered into pursuant to Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code, between the State Department of Health Care Services and a health care service plan for enrolled Medi-Cal beneficiaries.(f) (1) For the purpose of compliance with this section, a health care service plan may provide coverage for all or part of the mental health and substance use disorder services required by this section through a separate specialized health care service plan or mental health plan, and shall not be required to obtain an additional or specialized license for this purpose.(2) A health care service plan shall provide the mental health and substance use disorder coverage required by this section in its entire service area and in emergency situations as may be required by applicable laws and regulations. For purposes of this section, health care service plan contracts that provide benefits to enrollees through preferred provider contracting arrangements are not precluded from requiring enrollees who reside or work in geographic areas served by specialized health care service plans or mental health plans to secure all or part of their mental health services within those geographic areas served by specialized health care service plans or mental health plans, provided that all appropriate mental health or substance use disorder services are actually available within those geographic service areas within timeliness standards.(3) Notwithstanding any other law, in the provision of benefits required by this section, a health care service plan may utilize case management, network providers, utilization review techniques, prior authorization, copayments, or other cost sharing, provided that these practices are consistent with Section 1374.76 of this code, and Section 2052 of the Business and Professions Code.(g) This section shall not be construed to deny or restrict in any way the departments authority to ensure plan compliance with this chapter.(h) A health care service plan shall not limit benefits or coverage for medically necessary services on the basis that those services should be or could be covered by a public entitlement program, including, but not limited to, special education or an individualized education program, Medicaid, Medicare, Supplemental Security Income, or Social Security Disability Insurance, and shall not include or enforce a contract term that excludes otherwise covered benefits on the basis that those services should be or could be covered by a public entitlement program.(i) A health care service plan shall not adopt, impose, or enforce terms in its plan contracts or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.SEC. 4. Section 1374.721 of the Health and Safety Code is amended to read:1374.721. (a) (1) A health care service plan that provides hospital, medical, or surgical coverage shall base any medical necessity determination or the utilization review criteria that the plan, and any entity acting on the plans behalf, applies to determine the medical necessity of health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders on current generally accepted standards of mental health and substance use disorder care.(2) A health care service plan, and any entity acting on the plans behalf, shall not use any criteria in addition to the generally accepted standards of substance use disorder, as defined in subparagraph (B) of paragraph (1) of subdivision (f), to make a medical necessity determination, or for the utilization review criteria, for health care services and benefits for the diagnosis, prevention, and treatment of substance use disorders.(b) In conducting utilization review of all covered health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders conditions in children, adolescents, and adults, a health care service plan shall apply the criteria and guidelines set forth in the most recent versions of the treatment criteria developed by the nonprofit professional association for the relevant clinical specialty.(c) In conducting utilization review involving level of care placement decisions or any other patient care decisions that are within the scope of the sources specified in subdivision (b), a health care service plan shall not apply different, additional, conflicting, or more restrictive utilization review criteria than the criteria and guidelines set forth in those sources. This subdivision does not prohibit a health care service plan from applying utilization review criteria to health care services and benefits for mental health and substance use disorders conditions that meet either of the following criteria:(1) Are outside the scope of the criteria and guidelines set forth in the sources specified in subdivision (b), provided the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).(2) Relate to advancements in technology or types of care that are not covered in the most recent versions of the sources specified in subdivision (b), provided that the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).(d) If a health care service plan purchases or licenses utilization review criteria pursuant to paragraph (1) or (2) of subdivision (c), the plan shall verify and document before use that the criteria were developed in accordance with paragraph (1) of subdivision (a).(e) To ensure the proper use of the criteria described in subdivision subdivisions (a) and (b), every health care service plan shall do all of the following:(1) Sponsor a formal education program by nonprofit clinical specialty associations associations, including, but not limited to, the American Society of Addiction Medicine, to educate the health care service plans staff, including any third parties contracted with the health care service plan to review claims, conduct utilization reviews, or make medical necessity determinations about the clinical review criteria.(2) Make the education program available to other stakeholders, including the health care service plans participating providers and covered lives. Participating providers shall not be required to participate in the education program.(3) Provide, at no cost, the clinical review criteria and any training material or resources to providers and health care service plan enrollees.(4) Track, identify, and analyze how the clinical review criteria are used to certify care, deny care, and support the appeals process.(5) Conduct interrater reliability testing to ensure consistency in utilization review decisionmaking covering how medical necessity decisions are made. This assessment shall cover all aspects of utilization review as defined in paragraph (3) of subdivision (f).(6) Run interrater reliability reports about how the clinical guidelines are used in conjunction with the utilization management process and parity compliance activities.(7) Achieve interrater reliability pass rates of at least 90 percent and, if this threshold is not met, immediately provide for the remediation of poor interrater reliability and interrater reliability testing for all new staff before they can conduct utilization review without supervision.(f) The following definitions apply for purposes of this section:(1) (A) Generally accepted standards of mental health and substance use disorder care means standards of care and clinical practice that are generally recognized by health care providers practicing in relevant clinical specialties such as specialties, including psychiatry, psychology, clinical sociology, addiction medicine and counseling, and behavioral health treatment pursuant to Section 1374.73. Valid, evidence-based sources establishing generally accepted standards of mental health and substance use disorder care include peer-reviewed scientific studies and medical literature, clinical practice guidelines and recommendations of nonprofit health care provider professional associations, specialty societies and federal government agencies, and drug labeling approved by the United States Food and Drug Administration.(B) Generally accepted standards of substance use disorder care means the patient placement criteria established by the American Society of Addiction Medicine.(2) Mental health and substance use disorders has the same meaning as defined in paragraph (2) of subdivision (a) of Section 1374.72.(3) Utilization review means either of the following:(A) Prospectively, retrospectively, or concurrently reviewing and approving, modifying, delaying, or denying, based in whole or in part on medical necessity, requests by health care providers, enrollees, or their authorized representatives for coverage of health care services prior to, retrospectively or concurrent with the provision of health care services to enrollees.(B) Evaluating the medical necessity, appropriateness, level of care, service intensity, efficacy, or efficiency of health care services, benefits, procedures, or settings, under any circumstances, to determine whether a health care service or benefit subject to a medical necessity coverage requirement in a health care service plan contract is covered as medically necessary for an enrollee.(4) Utilization review criteria means any criteria, standards, protocols, or guidelines used by a health care service plan to conduct utilization review.(g) This section applies to all health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders covered by a health care service plan contract, including prescription drugs.(h) This section applies to a health care service plan that conducts utilization review as defined in this section, and any entity or contracting provider that performs utilization review or utilization management functions on behalf of a health care service plan.(i) The director may assess administrative penalties for violations of this section as provided for in Section 1368.04, in addition to any other remedies permitted by law.(j) A health care service plan shall not adopt, impose, or enforce terms in its plan contracts or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.(k) (1) The utilization review process and utilization review criteria for mental health and substance use disorder care used by a health care service plan, or an entity acting on its behalf, shall be accredited by an independent, nonprofit organization on or before July 1, 2023, and the health care service plan, or the entity acting on its behalf, shall maintain an active accreditation while providing utilization review services.(2) The director shall adopt rules to govern the selection of an independent, nonprofit organization to provide the accreditation services. Until those rules are adopted, the director shall designate the Utilization Review Accreditation Commission as the accrediting organization.(3) The accreditation shall certify that the utilization review process includes specific criteria, including, but not limited to, all of the following:(A) Issuing utilization review decisions in a timely manner.(B) The appropriate scope of medical material used in issuing a utilization review decision.(C) Conducting peer-to-peer consultation.(D) Providing for an internal appeals procedure.(E) Implementing a policy that prohibits physicians, surgeons, and other providers from receiving an incentive based on the utilization review decision.(4) The director shall adopt rules that require additional specific criteria for accrediting a utilization review process, including, but not limited to, all of the following:(A) A physician and surgeon providing utilization review services shall hold an unrestricted license to practice medicine in this state issued pursuant to Section 2050 of the Business and Professions Code or issued by the Osteopathic Medical Board of California under the Osteopathic Act.(B) The health care service plan, or an entity acting on the plans behalf, shall maintain telephone access during California business hours for physicians and surgeons to request authorization for mental health and substance use disorder care and conduct peer-to-peer discussions regarding issues, including the appropriateness of a requested treatment, modification of a treatment request, or obtaining additional information needed to make a medical necessity determination.(C) The health care service plan, or an entity acting on the plans behalf, shall disclose any financial conflict of interest between the health care service plan, or the entity acting on the plans behalf, and any other contracting entity that may impact the medical necessity determination.(D) A physician and surgeon providing utilization review services shall disclose to the treating provider the total number of reviews conducted and the percentage of services approved and denied.(l) If a utilization review request or appeal is filed regarding the medical necessity of a substance use disorder treatment or service, there is a rebuttable presumption that the treatment or service recommended by a physician and surgeon credentialed by the American Society of Addiction Medicine or the California Society of Addiction Medicine is medically necessary.(k)(m) This section does not apply to contracts entered into pursuant to Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code, between the State Department of Health Care Services and a health care service plan for enrolled Medi-Cal beneficiaries.SEC. 5. Section 10144.5 of the Insurance Code is amended to read:10144.5. (a) (1) Every disability insurance policy issued, amended, or renewed on or after January 1, 2021, that provides hospital, medical, or surgical coverage shall provide coverage for medically necessary treatment of mental health and substance use disorders, under the same terms and conditions applied to other medical conditions as specified in subdivision (c).(2) For purposes of this section, mental health and substance use disorders means a mental health condition or substance use disorder that falls under any of the diagnostic categories listed in the mental and behavioral disorders chapter of the most recent edition of the World Health Organizations International Statistical Classification of Diseases and Related Health Problems, or that is listed in the most recent version of the American Psychiatric Associations Diagnostic and Statistical Manual of Mental Disorders. Changes in terminology, organization, or classification of mental health and substance use disorders in future versions of the American Psychiatric Associations Diagnostic and Statistical Manual of Mental Disorders or the World Health Organizations International Statistical Classification of Diseases and Related Health Problems shall not affect the conditions covered by this section as long as a condition is commonly understood to be a mental health or substance use disorder by health care providers practicing in relevant clinical specialties.(3) (A) For purposes of this section, medically necessary treatment of a mental health or substance use disorder means a service or product addressing the specific needs of that patient, for the purpose of preventing, diagnosing, or treating an illness, injury, condition, or its symptoms, including minimizing the progression of an illness, injury, condition, or its symptoms, in a manner that is all of the following:(i) In accordance with the generally accepted standards of mental health and substance use disorder care.(ii) Clinically appropriate in terms of type, frequency, extent, site, and duration.(iii) Not primarily for the economic benefit of the disability insurer and insureds or for the convenience of the patient, treating physician, or other health care provider.(B) This paragraph does not limit in any way the independent medical review rights of an insured or policyholder under this chapter.(4) Health care provider means any of the following:(A) A person who is licensed under Division 2 (commencing with Section 500) of the Business and Professions Code.(B) An associate marriage and family therapist or marriage and family therapist trainee functioning pursuant to Section 4980.43.3 of the Business and Professions Code.(C) A qualified autism service provider or qualified autism service professional certified by a national entity pursuant to Section 1374.73 of the Health and Safety Code and Section 10144.51.(D) An associate clinical social worker functioning pursuant to Section 4996.23.2 of the Business and Professions Code.(E) An associate professional clinical counselor or professional clinical counselor trainee functioning pursuant to Section 4999.46.3 of the Business and Professions Code.(F) A registered psychologist, as described in Section 2909.5 of the Business and Professions Code.(G) A registered psychological assistant, as described in Section 2913 of the Business and Professions Code.(H) A psychology trainee or person supervised as set forth in Section 2910 or 2911 of, or subdivision (d) of Section 2914 of, the Business and Professions Code.(5) For purposes of this section, generally accepted standards of mental health and substance use disorder care has the same meaning means the generally accepted standards of mental health care and the generally accepted standards of substance use disorder care as defined in subparagraphs (A) and (B) of paragraph (1) of subdivision (f) of Section 10144.52.(6) A disability insurer shall not limit benefits or coverage for mental health and substance use disorders to short-term or acute treatment.(7) All medical necessity determinations made by the disability insurer concerning service intensity, level of care placement, continued stay, and transfer or discharge of insureds diagnosed with mental health and substance use disorders shall be conducted in accordance with the requirements of Section 10144.52.(8) A disability insurer that authorizes a specific type of treatment by a provider pursuant to this section shall not rescind or modify the authorization after the provider renders the health care service in good faith and pursuant to this authorization for any reason, including, but not limited to, the insurers subsequent rescission, cancellation, or modification of the insureds or policyholders contract, or the insurers subsequent determination that it did not make an accurate determination of the insureds or policyholders eligibility. This section shall not be construed to expand or alter the benefits available to the insured or policyholder under an insurance policy.(b) The benefits that shall be covered pursuant to this section shall include, but not be limited to, the following:(1) Basic health care services, as defined in subdivision (b) of Section 1345 of the Health and Safety Code.(2) Intermediate services, including the full range of levels of care, including, but not limited to, residential treatment, partial hospitalization, and intensive outpatient treatment.(3) Prescription drugs, if the policy includes coverage for prescription drugs.(c) The terms and conditions applied to the benefits required by this section, that shall be applied equally to all benefits under the disability insurance policy shall include, but not be limited to, all of the following patient financial responsibilities:(1) Maximum and annual lifetime benefits, if not prohibited by applicable law.(2) Copayments and coinsurance.(3) Individual and family deductibles.(4) Out-of-pocket maximums.(d) If services for the medically necessary treatment of a mental health or substance use disorder are not available in network within the geographic and timely access standards set by law or regulation, the disability insurer shall arrange coverage to ensure the delivery of medically necessary out-of-network services and any medically necessary followup services that, to the maximum extent possible, meet those geographic and timely access standards. As used in this subdivision, to arrange coverage to ensure the delivery of medically necessary out-of-network services includes, but is not limited to, providing services to secure medically necessary out-of-network options that are available to the insured within geographic and timely access standards. The insured shall pay no more than the same cost sharing that the insured would pay for the same covered services received from an in-network provider.(e) This section shall not apply to accident-only, specified disease, hospital indemnity, Medicare supplement, dental-only, or vision-only insurance policies.(f) (1) For the purpose of compliance with this section, a disability insurer may provide coverage for all or part of the mental health and substance use disorder services required by this section through a separate specialized health insurance policy or mental health policy. This paragraph shall not apply to policies that are subject to Section 10112.27.(2) A disability insurer shall provide the mental health and substance use disorder coverage required by this section in its entire service area and in emergency situations as may be required by applicable laws and regulations. For purposes of this section, disability insurance policies that provide benefits to insureds through preferred provider contracting arrangements are not precluded from requiring insureds who reside or work in geographic areas served by specialized health insurance policies or mental health insurance policies to secure all or part of their mental health services within those geographic areas served by specialized health insurance policies or mental health insurance policies, provided that all appropriate mental health or substance use disorder services are actually available within those geographic service areas within timeliness standards.(3) Notwithstanding any other law, in the provision of benefits required by this section, a disability insurer may utilize case management, network providers, utilization review techniques, prior authorization, copayments, or other cost sharing, provided that these practices are consistent with Section 10144.4 of this code, and Section 2052 of the Business and Professions Code.(g) This section shall not be construed to deny or restrict in any way the departments authority to ensure a disability insurers compliance with this code.(h) A disability insurer shall not limit benefits or coverage for medically necessary services on the basis that those services should be or could be covered by a public entitlement program, including, but not limited to, special education or an individualized education program, Medicaid, Medicare, Supplemental Security Income, or Social Security Disability Insurance, and shall not include or enforce a contract term that excludes otherwise covered benefits on the basis that those services should be or could be covered by a public entitlement program.(i) A disability insurer shall not adopt, impose, or enforce terms in its policies or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.(j) If the commissioner determines that a disability insurer has violated this section, the commissioner may, after appropriate notice and opportunity for hearing in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), by order, assess a civil penalty not to exceed five thousand dollars ($5,000) for each violation, or, if a violation was willful, a civil penalty not to exceed ten thousand dollars ($10,000) for each violation.SEC. 6. Section 10144.52 of the Insurance Code is amended to read:10144.52. (a) (1) A disability insurer that provides hospital, medical, or surgical coverage shall base any medical necessity determination or the utilization review criteria that the insurer, and any entity acting on the insurers behalf, applies to determine the medical necessity of health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders on current generally accepted standards of mental health and substance use disorder care.(2) A disability insurer, and any entity acting on the insurers behalf, shall not use any criteria in addition to the generally accepted standards of substance use disorder, as defined in subparagraph (B) of paragraph (1) of subdivision (f), to make a medical necessity determination, or for the utilization review criteria, for health care services and benefits for the diagnosis, prevention, and treatment of substance use disorders.(b) In conducting utilization review of all covered health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders conditions in children, adolescents, and adults, a disability insurer shall apply the criteria and guidelines set forth in the most recent versions of the treatment criteria developed by the nonprofit professional association for the relevant clinical specialty.(c) In conducting utilization review involving level of care placement decisions or any other patient care decisions that are within the scope of the sources specified in subdivision (b), a disability insurer shall not apply different, additional, conflicting, or more restrictive utilization review criteria than the criteria and guidelines set forth in those sources. This subdivision does not prohibit a disability insurer from applying utilization review criteria to health care services and benefits for mental health and substance use disorders conditions that meet either of the following criteria:(1) Are outside the scope of the criteria and guidelines set forth in the sources specified in subdivision (b), provided the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).(2) Relate to advancements in technology or types of care that are not covered in the most recent versions of the sources specified in subdivision (b), provided that the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).(d) If a disability insurer purchases or licenses utilization review criteria pursuant to paragraph (1) or (2) of subdivision (c), the insurer shall verify and document before use that the criteria were developed in accordance with paragraph (1) of subdivision (a).(e) To ensure the proper use of the criteria described in subdivision subdivisions (a) and (b), every disability insurer shall do all of the following:(1) Sponsor a formal education program by nonprofit clinical specialty associations associations, including, but not limited to, the American Society of Addiction Medicine, to educate the disability insurers staff, including any third parties contracted with the disability insurer to review claims, conduct utilization reviews, or make medical necessity determinations about the clinical review criteria.(2) Make the education program available to other stakeholders, including the insurers participating providers and covered lives.(3) Provide, at no cost, the clinical review criteria and any training material or resources to providers and insured patients.(4) Track, identify, and analyze how the clinical review criteria are used to certify care, deny care, and support the appeals process.(5) Conduct interrater reliability testing to ensure consistency in utilization review decisionmaking covering how medical necessity decisions are made. This assessment shall cover all aspects of utilization review as defined in paragraph (3) of subdivision (f).(6) Run interrater reliability reports about how the clinical guidelines are used in conjunction with the utilization management process and parity compliance activities.(7) Achieve interrater reliability pass rates of at least 90 percent and, if this threshold is not met, immediately provide for the remediation of poor interrater reliability and interrater reliability testing for all new staff before they can conduct utilization review without supervision.(f) The following definitions apply for purposes of this section:(1) (A) Generally accepted standards of mental health and substance use disorder care means standards of care and clinical practice that are generally recognized by health care providers practicing in relevant clinical specialties such as specialties, including psychiatry, psychology, clinical sociology, addiction medicine and counseling, and behavioral health treatment pursuant to Section 10144.51. Valid, evidence-based sources establishing generally accepted standards of mental health and substance use disorder care include peer-reviewed scientific studies and medical literature, clinical practice guidelines and recommendations of nonprofit health care provider professional associations, specialty societies and federal government agencies, and drug labeling approved by the United States Food and Drug Administration.(B) Generally accepted standards of substance use disorder care means the patient placement criteria established by the American Society of Addiction Medicine.(2) Mental health and substance use disorders has the same meaning as defined in paragraph (2) of subdivision (a) of Section 10144.5.(3) Utilization review means either of the following:(A) Prospectively, retrospectively, or concurrently reviewing and approving, modifying, delaying, or denying, based in whole or in part on medical necessity, requests by health care providers, insureds, or their authorized representatives for coverage of health care services prior to, retrospectively or concurrent with the provision of health care services to insureds.(B) Evaluating the medical necessity, appropriateness, level of care, service intensity, efficacy, or efficiency of health care services, benefits, procedures, or settings, under any circumstances, to determine whether a health care service or benefit subject to a medical necessity coverage requirement in a disability insurance policy is covered as medically necessary for an insured.(4) Utilization review criteria means any criteria, standards, protocols, or guidelines used by a disability insurer to conduct utilization review.(g) This section applies to all health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders covered by a disability insurance policy, including prescription drugs.(h) This section applies to a disability insurer that covers hospital, medical, or surgical expenses and conducts utilization review as defined in this section, and any entity or contracting provider that performs utilization review or utilization management functions on an insurers behalf.(i) If the commissioner determines that a disability insurer has violated this section, the commissioner may, after appropriate notice and opportunity for hearing in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), by order, assess a civil penalty not to exceed five thousand dollars ($5,000) for each violation, or, if a violation was willful, a civil penalty not to exceed ten thousand dollars ($10,000) for each violation.(j) A disability insurer shall not adopt, impose, or enforce terms in its policies or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.(k) (1) The utilization review process and utilization review criteria for mental health and substance use disorder care used by a disability insurer, or an entity acting on its behalf, shall be accredited by an independent, nonprofit organization on or before July 1, 2023, and the disability insurer, or the entity acting on its behalf, shall maintain an active accreditation while providing utilization review services.(2) The commissioner shall adopt rules to govern the selection of an independent, nonprofit organization to provide the accreditation services. Until those rules are adopted, the commissioner shall designate the Utilization Review Accreditation Commission as the accrediting organization.(3) The accreditation shall certify that the utilization review process includes specific criteria, including, but not limited to, all of the following:(A) Issuing utilization review decisions in a timely manner.(B) The appropriate scope of medical material used in issuing a utilization review decision.(C) Conducting peer-to-peer consultation.(D) Providing for an internal appeals procedure.(E) Implementing a policy that prohibits physicians, surgeons, and other providers from receiving an incentive based on the utilization review decision.(4) The commissioner shall adopt rules that require additional specific criteria for accrediting a utilization review process, including, but not limited to, all of the following:(A) A physician and surgeon providing utilization review services shall hold an unrestricted license to practice medicine in this state issued pursuant to Section 2050 of the Business and Professions Code or issued by the Osteopathic Medical Board of California under the Osteopathic Act.(B) The disability insurer, or an entity acting on the insurers behalf, shall maintain telephone access during California business hours for physicians and surgeons to request authorization for mental health and substance use disorder care and conduct peer-to-peer discussions regarding issues, including the appropriateness of a requested treatment, modification of a treatment request, or obtaining additional information needed to make a medical necessity determination.(C) The disability insurer, or an entity acting on the insurers behalf, shall disclose any financial conflict of interest between the disability insurer, or the entity acting on the insurers behalf, and any other contracting entity that may impact the medical necessity determination.(D) A physician and surgeon providing utilization review services shall disclose to the treating provider the total number of reviews conducted and the percentage of services approved and denied.(l) If a utilization review request or appeal is filed regarding the medical necessity of a substance use disorder treatment or service, there is a rebuttable presumption that the treatment or service recommended by a physician and surgeon credentialed by the American Society of Addiction Medicine or the California Society of Addiction Medicine is medically necessary.(k)(m) This section does not apply to accident-only, specified disease, hospital indemnity, Medicare supplement, dental-only, or vision-only insurance policies.SEC. 7. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
The people of the State of California do enact as follows:
## The people of the State of California do enact as follows:
SECTION 1. This act shall be known, and may be cited, as the California Residential Substance Use Disorder Treatment Patient Safety and Fairness Act.
SECTION 1. This act shall be known, and may be cited, as the California Residential Substance Use Disorder Treatment Patient Safety and Fairness Act.
SECTION 1. This act shall be known, and may be cited, as the California Residential Substance Use Disorder Treatment Patient Safety and Fairness Act.
### SECTION 1.
SEC. 2. The Legislature finds and declares all of the following: (a) The federal Affordable Care Act (ACA) includes mental health and addiction coverage as one of the 10 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.(b) When medically necessary mental health and substance use disorder care is not covered, individuals with mental health and substance use disorders often have their conditions worsen, ending up on Medicaid, in the criminal justice system, or on the streets, resulting in harm to individuals and communities, and higher costs to taxpayers.(c) In two court decisions, Harlick v. Blue Shield of California, 686 F.3d 699 (9th Cir. 2011), cert. denied, 133 S.Ct. 1492 (2013), and Rea v. Blue Shield of California, 226 Cal.App.4th 1209, 1227 (2014), the California Mental Health Parity Act was interpreted to require coverage of medically necessary residential treatment. (d) Coverage of intermediate levels of care such as residential treatment, which are essential components of the level of care continuum called for by nonprofit organizations, and clinical specialty associations such as the American Society of Addiction Medicine, are often denied through overly restrictive medical necessity determinations.
SEC. 2. The Legislature finds and declares all of the following: (a) The federal Affordable Care Act (ACA) includes mental health and addiction coverage as one of the 10 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.(b) When medically necessary mental health and substance use disorder care is not covered, individuals with mental health and substance use disorders often have their conditions worsen, ending up on Medicaid, in the criminal justice system, or on the streets, resulting in harm to individuals and communities, and higher costs to taxpayers.(c) In two court decisions, Harlick v. Blue Shield of California, 686 F.3d 699 (9th Cir. 2011), cert. denied, 133 S.Ct. 1492 (2013), and Rea v. Blue Shield of California, 226 Cal.App.4th 1209, 1227 (2014), the California Mental Health Parity Act was interpreted to require coverage of medically necessary residential treatment. (d) Coverage of intermediate levels of care such as residential treatment, which are essential components of the level of care continuum called for by nonprofit organizations, and clinical specialty associations such as the American Society of Addiction Medicine, are often denied through overly restrictive medical necessity determinations.
SEC. 2. The Legislature finds and declares all of the following:
### SEC. 2.
(a) The federal Affordable Care Act (ACA) includes mental health and addiction coverage as one of the 10 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.
(b) When medically necessary mental health and substance use disorder care is not covered, individuals with mental health and substance use disorders often have their conditions worsen, ending up on Medicaid, in the criminal justice system, or on the streets, resulting in harm to individuals and communities, and higher costs to taxpayers.
(c) In two court decisions, Harlick v. Blue Shield of California, 686 F.3d 699 (9th Cir. 2011), cert. denied, 133 S.Ct. 1492 (2013), and Rea v. Blue Shield of California, 226 Cal.App.4th 1209, 1227 (2014), the California Mental Health Parity Act was interpreted to require coverage of medically necessary residential treatment.
(d) Coverage of intermediate levels of care such as residential treatment, which are essential components of the level of care continuum called for by nonprofit organizations, and clinical specialty associations such as the American Society of Addiction Medicine, are often denied through overly restrictive medical necessity determinations.
SEC. 3. Section 1374.72 of the Health and Safety Code is amended to read:1374.72. (a) (1) Every health care service plan contract issued, amended, or renewed on or after January 1, 2021, that provides hospital, medical, or surgical coverage shall provide coverage for medically necessary treatment of mental health and substance use disorders, under the same terms and conditions applied to other medical conditions as specified in subdivision (c).(2) For purposes of this section, mental health and substance use disorders means a mental health condition or substance use disorder that falls under any of the diagnostic categories listed in the mental and behavioral disorders chapter of the most recent edition of the International Classification of Diseases or that is listed in the most recent version of the Diagnostic and Statistical Manual of Mental Disorders. Changes in terminology, organization, or classification of mental health and substance use disorders in future versions of the American Psychiatric Associations Diagnostic and Statistical Manual of Mental Disorders or the World Health Organizations International Statistical Classification of Diseases and Related Health Problems shall not affect the conditions covered by this section as long as a condition is commonly understood to be a mental health or substance use disorder by health care providers practicing in relevant clinical specialties.(3) (A) For purposes of this section, medically necessary treatment of a mental health or substance use disorder means a service or product addressing the specific needs of that patient, for the purpose of preventing, diagnosing, or treating an illness, injury, condition, or its symptoms, including minimizing the progression of that illness, injury, condition, or its symptoms, in a manner that is all of the following:(i) In accordance with the generally accepted standards of mental health and substance use disorder care.(ii) Clinically appropriate in terms of type, frequency, extent, site, and duration.(iii) Not primarily for the economic benefit of the health care service plan and subscribers or for the convenience of the patient, treating physician, or other health care provider.(B) This paragraph does not limit in any way the independent medical review rights of an enrollee or subscriber under this chapter.(4) For purposes of this section, health care provider means any of the following:(A) A person who is licensed under Division 2 (commencing with Section 500) of the Business and Professions Code.(B) An associate marriage and family therapist or marriage and family therapist trainee functioning pursuant to Section 4980.43.3 of the Business and Professions Code.(C) A qualified autism service provider or qualified autism service professional certified by a national entity pursuant to Section 10144.51 of the Insurance Code and Section 1374.73.(D) An associate clinical social worker functioning pursuant to Section 4996.23.2 of the Business and Professions Code.(E) An associate professional clinical counselor or professional clinical counselor trainee functioning pursuant to Section 4999.46.3 of the Business and Professions Code.(F) A registered psychologist, as described in Section 2909.5 of the Business and Professions Code.(G) A registered psychological assistant, as described in Section 2913 of the Business and Professions Code.(H) A psychology trainee or person supervised as set forth in Section 2910 or 2911 of, or subdivision (d) of Section 2914 of, the Business and Professions Code.(5) For purposes of this section, generally accepted standards of mental health and substance use disorder care has the same meaning means the generally accepted standards of mental health care and the generally accepted standards of substance use disorder care as defined in subparagraphs (A) and (B) of paragraph (1) of subdivision (f) of Section 1374.721.(6) A health care service plan shall not limit benefits or coverage for mental health and substance use disorders to short-term or acute treatment.(7) All medical necessity determinations by the health care service plan concerning service intensity, level of care placement, continued stay, and transfer or discharge of enrollees diagnosed with mental health and substance use disorders shall be conducted in accordance with the requirements of Section 1374.721. This paragraph does not deprive an enrollee of the other protections of this chapter, including, but not limited to, grievances, appeals, independent medical review, discharge, transfer, and continuity of care.(8) A health care service plan that authorizes a specific type of treatment by a provider pursuant to this section shall not rescind or modify the authorization after the provider renders the health care service in good faith and pursuant to this authorization for any reason, including, but not limited to, the plans subsequent rescission, cancellation, or modification of the enrollees or subscribers contract, or the plans subsequent determination that it did not make an accurate determination of the enrollees or subscribers eligibility. This section shall not be construed to expand or alter the benefits available to the enrollee or subscriber under a plan.(b) The benefits that shall be covered pursuant to this section shall include, but not be limited to, the following:(1) Basic health care services, as defined in subdivision (b) of Section 1345.(2) Intermediate services, including the full range of levels of care, including, but not limited to, residential treatment, partial hospitalization, and intensive outpatient treatment.(3) Prescription drugs, if the plan contract includes coverage for prescription drugs.(c) The terms and conditions applied to the benefits required by this section, that shall be applied equally to all benefits under the plan contract, shall include, but not be limited to, all of the following patient financial responsibilities:(1) Maximum annual and lifetime benefits, if not prohibited by applicable law.(2) Copayments and coinsurance.(3) Individual and family deductibles.(4) Out-of-pocket maximums.(d) If services for the medically necessary treatment of a mental health or substance use disorder are not available in network within the geographic and timely access standards set by law or regulation, the health care service plan shall arrange coverage to ensure the delivery of medically necessary out-of-network services and any medically necessary followup services that, to the maximum extent possible, meet those geographic and timely access standards. As used in this subdivision, to arrange coverage to ensure the delivery of medically necessary out-of-network services includes, but is not limited to, providing services to secure medically necessary out-of-network options that are available to the enrollee within geographic and timely access standards. The enrollee shall pay no more than the same cost sharing that the enrollee would pay for the same covered services received from an in-network provider.(e) This section shall not apply to contracts entered into pursuant to Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code, between the State Department of Health Care Services and a health care service plan for enrolled Medi-Cal beneficiaries.(f) (1) For the purpose of compliance with this section, a health care service plan may provide coverage for all or part of the mental health and substance use disorder services required by this section through a separate specialized health care service plan or mental health plan, and shall not be required to obtain an additional or specialized license for this purpose.(2) A health care service plan shall provide the mental health and substance use disorder coverage required by this section in its entire service area and in emergency situations as may be required by applicable laws and regulations. For purposes of this section, health care service plan contracts that provide benefits to enrollees through preferred provider contracting arrangements are not precluded from requiring enrollees who reside or work in geographic areas served by specialized health care service plans or mental health plans to secure all or part of their mental health services within those geographic areas served by specialized health care service plans or mental health plans, provided that all appropriate mental health or substance use disorder services are actually available within those geographic service areas within timeliness standards.(3) Notwithstanding any other law, in the provision of benefits required by this section, a health care service plan may utilize case management, network providers, utilization review techniques, prior authorization, copayments, or other cost sharing, provided that these practices are consistent with Section 1374.76 of this code, and Section 2052 of the Business and Professions Code.(g) This section shall not be construed to deny or restrict in any way the departments authority to ensure plan compliance with this chapter.(h) A health care service plan shall not limit benefits or coverage for medically necessary services on the basis that those services should be or could be covered by a public entitlement program, including, but not limited to, special education or an individualized education program, Medicaid, Medicare, Supplemental Security Income, or Social Security Disability Insurance, and shall not include or enforce a contract term that excludes otherwise covered benefits on the basis that those services should be or could be covered by a public entitlement program.(i) A health care service plan shall not adopt, impose, or enforce terms in its plan contracts or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.
SEC. 3. Section 1374.72 of the Health and Safety Code is amended to read:
### SEC. 3.
1374.72. (a) (1) Every health care service plan contract issued, amended, or renewed on or after January 1, 2021, that provides hospital, medical, or surgical coverage shall provide coverage for medically necessary treatment of mental health and substance use disorders, under the same terms and conditions applied to other medical conditions as specified in subdivision (c).(2) For purposes of this section, mental health and substance use disorders means a mental health condition or substance use disorder that falls under any of the diagnostic categories listed in the mental and behavioral disorders chapter of the most recent edition of the International Classification of Diseases or that is listed in the most recent version of the Diagnostic and Statistical Manual of Mental Disorders. Changes in terminology, organization, or classification of mental health and substance use disorders in future versions of the American Psychiatric Associations Diagnostic and Statistical Manual of Mental Disorders or the World Health Organizations International Statistical Classification of Diseases and Related Health Problems shall not affect the conditions covered by this section as long as a condition is commonly understood to be a mental health or substance use disorder by health care providers practicing in relevant clinical specialties.(3) (A) For purposes of this section, medically necessary treatment of a mental health or substance use disorder means a service or product addressing the specific needs of that patient, for the purpose of preventing, diagnosing, or treating an illness, injury, condition, or its symptoms, including minimizing the progression of that illness, injury, condition, or its symptoms, in a manner that is all of the following:(i) In accordance with the generally accepted standards of mental health and substance use disorder care.(ii) Clinically appropriate in terms of type, frequency, extent, site, and duration.(iii) Not primarily for the economic benefit of the health care service plan and subscribers or for the convenience of the patient, treating physician, or other health care provider.(B) This paragraph does not limit in any way the independent medical review rights of an enrollee or subscriber under this chapter.(4) For purposes of this section, health care provider means any of the following:(A) A person who is licensed under Division 2 (commencing with Section 500) of the Business and Professions Code.(B) An associate marriage and family therapist or marriage and family therapist trainee functioning pursuant to Section 4980.43.3 of the Business and Professions Code.(C) A qualified autism service provider or qualified autism service professional certified by a national entity pursuant to Section 10144.51 of the Insurance Code and Section 1374.73.(D) An associate clinical social worker functioning pursuant to Section 4996.23.2 of the Business and Professions Code.(E) An associate professional clinical counselor or professional clinical counselor trainee functioning pursuant to Section 4999.46.3 of the Business and Professions Code.(F) A registered psychologist, as described in Section 2909.5 of the Business and Professions Code.(G) A registered psychological assistant, as described in Section 2913 of the Business and Professions Code.(H) A psychology trainee or person supervised as set forth in Section 2910 or 2911 of, or subdivision (d) of Section 2914 of, the Business and Professions Code.(5) For purposes of this section, generally accepted standards of mental health and substance use disorder care has the same meaning means the generally accepted standards of mental health care and the generally accepted standards of substance use disorder care as defined in subparagraphs (A) and (B) of paragraph (1) of subdivision (f) of Section 1374.721.(6) A health care service plan shall not limit benefits or coverage for mental health and substance use disorders to short-term or acute treatment.(7) All medical necessity determinations by the health care service plan concerning service intensity, level of care placement, continued stay, and transfer or discharge of enrollees diagnosed with mental health and substance use disorders shall be conducted in accordance with the requirements of Section 1374.721. This paragraph does not deprive an enrollee of the other protections of this chapter, including, but not limited to, grievances, appeals, independent medical review, discharge, transfer, and continuity of care.(8) A health care service plan that authorizes a specific type of treatment by a provider pursuant to this section shall not rescind or modify the authorization after the provider renders the health care service in good faith and pursuant to this authorization for any reason, including, but not limited to, the plans subsequent rescission, cancellation, or modification of the enrollees or subscribers contract, or the plans subsequent determination that it did not make an accurate determination of the enrollees or subscribers eligibility. This section shall not be construed to expand or alter the benefits available to the enrollee or subscriber under a plan.(b) The benefits that shall be covered pursuant to this section shall include, but not be limited to, the following:(1) Basic health care services, as defined in subdivision (b) of Section 1345.(2) Intermediate services, including the full range of levels of care, including, but not limited to, residential treatment, partial hospitalization, and intensive outpatient treatment.(3) Prescription drugs, if the plan contract includes coverage for prescription drugs.(c) The terms and conditions applied to the benefits required by this section, that shall be applied equally to all benefits under the plan contract, shall include, but not be limited to, all of the following patient financial responsibilities:(1) Maximum annual and lifetime benefits, if not prohibited by applicable law.(2) Copayments and coinsurance.(3) Individual and family deductibles.(4) Out-of-pocket maximums.(d) If services for the medically necessary treatment of a mental health or substance use disorder are not available in network within the geographic and timely access standards set by law or regulation, the health care service plan shall arrange coverage to ensure the delivery of medically necessary out-of-network services and any medically necessary followup services that, to the maximum extent possible, meet those geographic and timely access standards. As used in this subdivision, to arrange coverage to ensure the delivery of medically necessary out-of-network services includes, but is not limited to, providing services to secure medically necessary out-of-network options that are available to the enrollee within geographic and timely access standards. The enrollee shall pay no more than the same cost sharing that the enrollee would pay for the same covered services received from an in-network provider.(e) This section shall not apply to contracts entered into pursuant to Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code, between the State Department of Health Care Services and a health care service plan for enrolled Medi-Cal beneficiaries.(f) (1) For the purpose of compliance with this section, a health care service plan may provide coverage for all or part of the mental health and substance use disorder services required by this section through a separate specialized health care service plan or mental health plan, and shall not be required to obtain an additional or specialized license for this purpose.(2) A health care service plan shall provide the mental health and substance use disorder coverage required by this section in its entire service area and in emergency situations as may be required by applicable laws and regulations. For purposes of this section, health care service plan contracts that provide benefits to enrollees through preferred provider contracting arrangements are not precluded from requiring enrollees who reside or work in geographic areas served by specialized health care service plans or mental health plans to secure all or part of their mental health services within those geographic areas served by specialized health care service plans or mental health plans, provided that all appropriate mental health or substance use disorder services are actually available within those geographic service areas within timeliness standards.(3) Notwithstanding any other law, in the provision of benefits required by this section, a health care service plan may utilize case management, network providers, utilization review techniques, prior authorization, copayments, or other cost sharing, provided that these practices are consistent with Section 1374.76 of this code, and Section 2052 of the Business and Professions Code.(g) This section shall not be construed to deny or restrict in any way the departments authority to ensure plan compliance with this chapter.(h) A health care service plan shall not limit benefits or coverage for medically necessary services on the basis that those services should be or could be covered by a public entitlement program, including, but not limited to, special education or an individualized education program, Medicaid, Medicare, Supplemental Security Income, or Social Security Disability Insurance, and shall not include or enforce a contract term that excludes otherwise covered benefits on the basis that those services should be or could be covered by a public entitlement program.(i) A health care service plan shall not adopt, impose, or enforce terms in its plan contracts or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.
1374.72. (a) (1) Every health care service plan contract issued, amended, or renewed on or after January 1, 2021, that provides hospital, medical, or surgical coverage shall provide coverage for medically necessary treatment of mental health and substance use disorders, under the same terms and conditions applied to other medical conditions as specified in subdivision (c).(2) For purposes of this section, mental health and substance use disorders means a mental health condition or substance use disorder that falls under any of the diagnostic categories listed in the mental and behavioral disorders chapter of the most recent edition of the International Classification of Diseases or that is listed in the most recent version of the Diagnostic and Statistical Manual of Mental Disorders. Changes in terminology, organization, or classification of mental health and substance use disorders in future versions of the American Psychiatric Associations Diagnostic and Statistical Manual of Mental Disorders or the World Health Organizations International Statistical Classification of Diseases and Related Health Problems shall not affect the conditions covered by this section as long as a condition is commonly understood to be a mental health or substance use disorder by health care providers practicing in relevant clinical specialties.(3) (A) For purposes of this section, medically necessary treatment of a mental health or substance use disorder means a service or product addressing the specific needs of that patient, for the purpose of preventing, diagnosing, or treating an illness, injury, condition, or its symptoms, including minimizing the progression of that illness, injury, condition, or its symptoms, in a manner that is all of the following:(i) In accordance with the generally accepted standards of mental health and substance use disorder care.(ii) Clinically appropriate in terms of type, frequency, extent, site, and duration.(iii) Not primarily for the economic benefit of the health care service plan and subscribers or for the convenience of the patient, treating physician, or other health care provider.(B) This paragraph does not limit in any way the independent medical review rights of an enrollee or subscriber under this chapter.(4) For purposes of this section, health care provider means any of the following:(A) A person who is licensed under Division 2 (commencing with Section 500) of the Business and Professions Code.(B) An associate marriage and family therapist or marriage and family therapist trainee functioning pursuant to Section 4980.43.3 of the Business and Professions Code.(C) A qualified autism service provider or qualified autism service professional certified by a national entity pursuant to Section 10144.51 of the Insurance Code and Section 1374.73.(D) An associate clinical social worker functioning pursuant to Section 4996.23.2 of the Business and Professions Code.(E) An associate professional clinical counselor or professional clinical counselor trainee functioning pursuant to Section 4999.46.3 of the Business and Professions Code.(F) A registered psychologist, as described in Section 2909.5 of the Business and Professions Code.(G) A registered psychological assistant, as described in Section 2913 of the Business and Professions Code.(H) A psychology trainee or person supervised as set forth in Section 2910 or 2911 of, or subdivision (d) of Section 2914 of, the Business and Professions Code.(5) For purposes of this section, generally accepted standards of mental health and substance use disorder care has the same meaning means the generally accepted standards of mental health care and the generally accepted standards of substance use disorder care as defined in subparagraphs (A) and (B) of paragraph (1) of subdivision (f) of Section 1374.721.(6) A health care service plan shall not limit benefits or coverage for mental health and substance use disorders to short-term or acute treatment.(7) All medical necessity determinations by the health care service plan concerning service intensity, level of care placement, continued stay, and transfer or discharge of enrollees diagnosed with mental health and substance use disorders shall be conducted in accordance with the requirements of Section 1374.721. This paragraph does not deprive an enrollee of the other protections of this chapter, including, but not limited to, grievances, appeals, independent medical review, discharge, transfer, and continuity of care.(8) A health care service plan that authorizes a specific type of treatment by a provider pursuant to this section shall not rescind or modify the authorization after the provider renders the health care service in good faith and pursuant to this authorization for any reason, including, but not limited to, the plans subsequent rescission, cancellation, or modification of the enrollees or subscribers contract, or the plans subsequent determination that it did not make an accurate determination of the enrollees or subscribers eligibility. This section shall not be construed to expand or alter the benefits available to the enrollee or subscriber under a plan.(b) The benefits that shall be covered pursuant to this section shall include, but not be limited to, the following:(1) Basic health care services, as defined in subdivision (b) of Section 1345.(2) Intermediate services, including the full range of levels of care, including, but not limited to, residential treatment, partial hospitalization, and intensive outpatient treatment.(3) Prescription drugs, if the plan contract includes coverage for prescription drugs.(c) The terms and conditions applied to the benefits required by this section, that shall be applied equally to all benefits under the plan contract, shall include, but not be limited to, all of the following patient financial responsibilities:(1) Maximum annual and lifetime benefits, if not prohibited by applicable law.(2) Copayments and coinsurance.(3) Individual and family deductibles.(4) Out-of-pocket maximums.(d) If services for the medically necessary treatment of a mental health or substance use disorder are not available in network within the geographic and timely access standards set by law or regulation, the health care service plan shall arrange coverage to ensure the delivery of medically necessary out-of-network services and any medically necessary followup services that, to the maximum extent possible, meet those geographic and timely access standards. As used in this subdivision, to arrange coverage to ensure the delivery of medically necessary out-of-network services includes, but is not limited to, providing services to secure medically necessary out-of-network options that are available to the enrollee within geographic and timely access standards. The enrollee shall pay no more than the same cost sharing that the enrollee would pay for the same covered services received from an in-network provider.(e) This section shall not apply to contracts entered into pursuant to Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code, between the State Department of Health Care Services and a health care service plan for enrolled Medi-Cal beneficiaries.(f) (1) For the purpose of compliance with this section, a health care service plan may provide coverage for all or part of the mental health and substance use disorder services required by this section through a separate specialized health care service plan or mental health plan, and shall not be required to obtain an additional or specialized license for this purpose.(2) A health care service plan shall provide the mental health and substance use disorder coverage required by this section in its entire service area and in emergency situations as may be required by applicable laws and regulations. For purposes of this section, health care service plan contracts that provide benefits to enrollees through preferred provider contracting arrangements are not precluded from requiring enrollees who reside or work in geographic areas served by specialized health care service plans or mental health plans to secure all or part of their mental health services within those geographic areas served by specialized health care service plans or mental health plans, provided that all appropriate mental health or substance use disorder services are actually available within those geographic service areas within timeliness standards.(3) Notwithstanding any other law, in the provision of benefits required by this section, a health care service plan may utilize case management, network providers, utilization review techniques, prior authorization, copayments, or other cost sharing, provided that these practices are consistent with Section 1374.76 of this code, and Section 2052 of the Business and Professions Code.(g) This section shall not be construed to deny or restrict in any way the departments authority to ensure plan compliance with this chapter.(h) A health care service plan shall not limit benefits or coverage for medically necessary services on the basis that those services should be or could be covered by a public entitlement program, including, but not limited to, special education or an individualized education program, Medicaid, Medicare, Supplemental Security Income, or Social Security Disability Insurance, and shall not include or enforce a contract term that excludes otherwise covered benefits on the basis that those services should be or could be covered by a public entitlement program.(i) A health care service plan shall not adopt, impose, or enforce terms in its plan contracts or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.
1374.72. (a) (1) Every health care service plan contract issued, amended, or renewed on or after January 1, 2021, that provides hospital, medical, or surgical coverage shall provide coverage for medically necessary treatment of mental health and substance use disorders, under the same terms and conditions applied to other medical conditions as specified in subdivision (c).(2) For purposes of this section, mental health and substance use disorders means a mental health condition or substance use disorder that falls under any of the diagnostic categories listed in the mental and behavioral disorders chapter of the most recent edition of the International Classification of Diseases or that is listed in the most recent version of the Diagnostic and Statistical Manual of Mental Disorders. Changes in terminology, organization, or classification of mental health and substance use disorders in future versions of the American Psychiatric Associations Diagnostic and Statistical Manual of Mental Disorders or the World Health Organizations International Statistical Classification of Diseases and Related Health Problems shall not affect the conditions covered by this section as long as a condition is commonly understood to be a mental health or substance use disorder by health care providers practicing in relevant clinical specialties.(3) (A) For purposes of this section, medically necessary treatment of a mental health or substance use disorder means a service or product addressing the specific needs of that patient, for the purpose of preventing, diagnosing, or treating an illness, injury, condition, or its symptoms, including minimizing the progression of that illness, injury, condition, or its symptoms, in a manner that is all of the following:(i) In accordance with the generally accepted standards of mental health and substance use disorder care.(ii) Clinically appropriate in terms of type, frequency, extent, site, and duration.(iii) Not primarily for the economic benefit of the health care service plan and subscribers or for the convenience of the patient, treating physician, or other health care provider.(B) This paragraph does not limit in any way the independent medical review rights of an enrollee or subscriber under this chapter.(4) For purposes of this section, health care provider means any of the following:(A) A person who is licensed under Division 2 (commencing with Section 500) of the Business and Professions Code.(B) An associate marriage and family therapist or marriage and family therapist trainee functioning pursuant to Section 4980.43.3 of the Business and Professions Code.(C) A qualified autism service provider or qualified autism service professional certified by a national entity pursuant to Section 10144.51 of the Insurance Code and Section 1374.73.(D) An associate clinical social worker functioning pursuant to Section 4996.23.2 of the Business and Professions Code.(E) An associate professional clinical counselor or professional clinical counselor trainee functioning pursuant to Section 4999.46.3 of the Business and Professions Code.(F) A registered psychologist, as described in Section 2909.5 of the Business and Professions Code.(G) A registered psychological assistant, as described in Section 2913 of the Business and Professions Code.(H) A psychology trainee or person supervised as set forth in Section 2910 or 2911 of, or subdivision (d) of Section 2914 of, the Business and Professions Code.(5) For purposes of this section, generally accepted standards of mental health and substance use disorder care has the same meaning means the generally accepted standards of mental health care and the generally accepted standards of substance use disorder care as defined in subparagraphs (A) and (B) of paragraph (1) of subdivision (f) of Section 1374.721.(6) A health care service plan shall not limit benefits or coverage for mental health and substance use disorders to short-term or acute treatment.(7) All medical necessity determinations by the health care service plan concerning service intensity, level of care placement, continued stay, and transfer or discharge of enrollees diagnosed with mental health and substance use disorders shall be conducted in accordance with the requirements of Section 1374.721. This paragraph does not deprive an enrollee of the other protections of this chapter, including, but not limited to, grievances, appeals, independent medical review, discharge, transfer, and continuity of care.(8) A health care service plan that authorizes a specific type of treatment by a provider pursuant to this section shall not rescind or modify the authorization after the provider renders the health care service in good faith and pursuant to this authorization for any reason, including, but not limited to, the plans subsequent rescission, cancellation, or modification of the enrollees or subscribers contract, or the plans subsequent determination that it did not make an accurate determination of the enrollees or subscribers eligibility. This section shall not be construed to expand or alter the benefits available to the enrollee or subscriber under a plan.(b) The benefits that shall be covered pursuant to this section shall include, but not be limited to, the following:(1) Basic health care services, as defined in subdivision (b) of Section 1345.(2) Intermediate services, including the full range of levels of care, including, but not limited to, residential treatment, partial hospitalization, and intensive outpatient treatment.(3) Prescription drugs, if the plan contract includes coverage for prescription drugs.(c) The terms and conditions applied to the benefits required by this section, that shall be applied equally to all benefits under the plan contract, shall include, but not be limited to, all of the following patient financial responsibilities:(1) Maximum annual and lifetime benefits, if not prohibited by applicable law.(2) Copayments and coinsurance.(3) Individual and family deductibles.(4) Out-of-pocket maximums.(d) If services for the medically necessary treatment of a mental health or substance use disorder are not available in network within the geographic and timely access standards set by law or regulation, the health care service plan shall arrange coverage to ensure the delivery of medically necessary out-of-network services and any medically necessary followup services that, to the maximum extent possible, meet those geographic and timely access standards. As used in this subdivision, to arrange coverage to ensure the delivery of medically necessary out-of-network services includes, but is not limited to, providing services to secure medically necessary out-of-network options that are available to the enrollee within geographic and timely access standards. The enrollee shall pay no more than the same cost sharing that the enrollee would pay for the same covered services received from an in-network provider.(e) This section shall not apply to contracts entered into pursuant to Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code, between the State Department of Health Care Services and a health care service plan for enrolled Medi-Cal beneficiaries.(f) (1) For the purpose of compliance with this section, a health care service plan may provide coverage for all or part of the mental health and substance use disorder services required by this section through a separate specialized health care service plan or mental health plan, and shall not be required to obtain an additional or specialized license for this purpose.(2) A health care service plan shall provide the mental health and substance use disorder coverage required by this section in its entire service area and in emergency situations as may be required by applicable laws and regulations. For purposes of this section, health care service plan contracts that provide benefits to enrollees through preferred provider contracting arrangements are not precluded from requiring enrollees who reside or work in geographic areas served by specialized health care service plans or mental health plans to secure all or part of their mental health services within those geographic areas served by specialized health care service plans or mental health plans, provided that all appropriate mental health or substance use disorder services are actually available within those geographic service areas within timeliness standards.(3) Notwithstanding any other law, in the provision of benefits required by this section, a health care service plan may utilize case management, network providers, utilization review techniques, prior authorization, copayments, or other cost sharing, provided that these practices are consistent with Section 1374.76 of this code, and Section 2052 of the Business and Professions Code.(g) This section shall not be construed to deny or restrict in any way the departments authority to ensure plan compliance with this chapter.(h) A health care service plan shall not limit benefits or coverage for medically necessary services on the basis that those services should be or could be covered by a public entitlement program, including, but not limited to, special education or an individualized education program, Medicaid, Medicare, Supplemental Security Income, or Social Security Disability Insurance, and shall not include or enforce a contract term that excludes otherwise covered benefits on the basis that those services should be or could be covered by a public entitlement program.(i) A health care service plan shall not adopt, impose, or enforce terms in its plan contracts or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.
1374.72. (a) (1) Every health care service plan contract issued, amended, or renewed on or after January 1, 2021, that provides hospital, medical, or surgical coverage shall provide coverage for medically necessary treatment of mental health and substance use disorders, under the same terms and conditions applied to other medical conditions as specified in subdivision (c).
(2) For purposes of this section, mental health and substance use disorders means a mental health condition or substance use disorder that falls under any of the diagnostic categories listed in the mental and behavioral disorders chapter of the most recent edition of the International Classification of Diseases or that is listed in the most recent version of the Diagnostic and Statistical Manual of Mental Disorders. Changes in terminology, organization, or classification of mental health and substance use disorders in future versions of the American Psychiatric Associations Diagnostic and Statistical Manual of Mental Disorders or the World Health Organizations International Statistical Classification of Diseases and Related Health Problems shall not affect the conditions covered by this section as long as a condition is commonly understood to be a mental health or substance use disorder by health care providers practicing in relevant clinical specialties.
(3) (A) For purposes of this section, medically necessary treatment of a mental health or substance use disorder means a service or product addressing the specific needs of that patient, for the purpose of preventing, diagnosing, or treating an illness, injury, condition, or its symptoms, including minimizing the progression of that illness, injury, condition, or its symptoms, in a manner that is all of the following:
(i) In accordance with the generally accepted standards of mental health and substance use disorder care.
(ii) Clinically appropriate in terms of type, frequency, extent, site, and duration.
(iii) Not primarily for the economic benefit of the health care service plan and subscribers or for the convenience of the patient, treating physician, or other health care provider.
(B) This paragraph does not limit in any way the independent medical review rights of an enrollee or subscriber under this chapter.
(4) For purposes of this section, health care provider means any of the following:
(A) A person who is licensed under Division 2 (commencing with Section 500) of the Business and Professions Code.
(B) An associate marriage and family therapist or marriage and family therapist trainee functioning pursuant to Section 4980.43.3 of the Business and Professions Code.
(C) A qualified autism service provider or qualified autism service professional certified by a national entity pursuant to Section 10144.51 of the Insurance Code and Section 1374.73.
(D) An associate clinical social worker functioning pursuant to Section 4996.23.2 of the Business and Professions Code.
(E) An associate professional clinical counselor or professional clinical counselor trainee functioning pursuant to Section 4999.46.3 of the Business and Professions Code.
(F) A registered psychologist, as described in Section 2909.5 of the Business and Professions Code.
(G) A registered psychological assistant, as described in Section 2913 of the Business and Professions Code.
(H) A psychology trainee or person supervised as set forth in Section 2910 or 2911 of, or subdivision (d) of Section 2914 of, the Business and Professions Code.
(5) For purposes of this section, generally accepted standards of mental health and substance use disorder care has the same meaning means the generally accepted standards of mental health care and the generally accepted standards of substance use disorder care as defined in subparagraphs (A) and (B) of paragraph (1) of subdivision (f) of Section 1374.721.
(6) A health care service plan shall not limit benefits or coverage for mental health and substance use disorders to short-term or acute treatment.
(7) All medical necessity determinations by the health care service plan concerning service intensity, level of care placement, continued stay, and transfer or discharge of enrollees diagnosed with mental health and substance use disorders shall be conducted in accordance with the requirements of Section 1374.721. This paragraph does not deprive an enrollee of the other protections of this chapter, including, but not limited to, grievances, appeals, independent medical review, discharge, transfer, and continuity of care.
(8) A health care service plan that authorizes a specific type of treatment by a provider pursuant to this section shall not rescind or modify the authorization after the provider renders the health care service in good faith and pursuant to this authorization for any reason, including, but not limited to, the plans subsequent rescission, cancellation, or modification of the enrollees or subscribers contract, or the plans subsequent determination that it did not make an accurate determination of the enrollees or subscribers eligibility. This section shall not be construed to expand or alter the benefits available to the enrollee or subscriber under a plan.
(b) The benefits that shall be covered pursuant to this section shall include, but not be limited to, the following:
(1) Basic health care services, as defined in subdivision (b) of Section 1345.
(2) Intermediate services, including the full range of levels of care, including, but not limited to, residential treatment, partial hospitalization, and intensive outpatient treatment.
(3) Prescription drugs, if the plan contract includes coverage for prescription drugs.
(c) The terms and conditions applied to the benefits required by this section, that shall be applied equally to all benefits under the plan contract, shall include, but not be limited to, all of the following patient financial responsibilities:
(1) Maximum annual and lifetime benefits, if not prohibited by applicable law.
(2) Copayments and coinsurance.
(3) Individual and family deductibles.
(4) Out-of-pocket maximums.
(d) If services for the medically necessary treatment of a mental health or substance use disorder are not available in network within the geographic and timely access standards set by law or regulation, the health care service plan shall arrange coverage to ensure the delivery of medically necessary out-of-network services and any medically necessary followup services that, to the maximum extent possible, meet those geographic and timely access standards. As used in this subdivision, to arrange coverage to ensure the delivery of medically necessary out-of-network services includes, but is not limited to, providing services to secure medically necessary out-of-network options that are available to the enrollee within geographic and timely access standards. The enrollee shall pay no more than the same cost sharing that the enrollee would pay for the same covered services received from an in-network provider.
(e) This section shall not apply to contracts entered into pursuant to Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code, between the State Department of Health Care Services and a health care service plan for enrolled Medi-Cal beneficiaries.
(f) (1) For the purpose of compliance with this section, a health care service plan may provide coverage for all or part of the mental health and substance use disorder services required by this section through a separate specialized health care service plan or mental health plan, and shall not be required to obtain an additional or specialized license for this purpose.
(2) A health care service plan shall provide the mental health and substance use disorder coverage required by this section in its entire service area and in emergency situations as may be required by applicable laws and regulations. For purposes of this section, health care service plan contracts that provide benefits to enrollees through preferred provider contracting arrangements are not precluded from requiring enrollees who reside or work in geographic areas served by specialized health care service plans or mental health plans to secure all or part of their mental health services within those geographic areas served by specialized health care service plans or mental health plans, provided that all appropriate mental health or substance use disorder services are actually available within those geographic service areas within timeliness standards.
(3) Notwithstanding any other law, in the provision of benefits required by this section, a health care service plan may utilize case management, network providers, utilization review techniques, prior authorization, copayments, or other cost sharing, provided that these practices are consistent with Section 1374.76 of this code, and Section 2052 of the Business and Professions Code.
(g) This section shall not be construed to deny or restrict in any way the departments authority to ensure plan compliance with this chapter.
(h) A health care service plan shall not limit benefits or coverage for medically necessary services on the basis that those services should be or could be covered by a public entitlement program, including, but not limited to, special education or an individualized education program, Medicaid, Medicare, Supplemental Security Income, or Social Security Disability Insurance, and shall not include or enforce a contract term that excludes otherwise covered benefits on the basis that those services should be or could be covered by a public entitlement program.
(i) A health care service plan shall not adopt, impose, or enforce terms in its plan contracts or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.
SEC. 4. Section 1374.721 of the Health and Safety Code is amended to read:1374.721. (a) (1) A health care service plan that provides hospital, medical, or surgical coverage shall base any medical necessity determination or the utilization review criteria that the plan, and any entity acting on the plans behalf, applies to determine the medical necessity of health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders on current generally accepted standards of mental health and substance use disorder care.(2) A health care service plan, and any entity acting on the plans behalf, shall not use any criteria in addition to the generally accepted standards of substance use disorder, as defined in subparagraph (B) of paragraph (1) of subdivision (f), to make a medical necessity determination, or for the utilization review criteria, for health care services and benefits for the diagnosis, prevention, and treatment of substance use disorders.(b) In conducting utilization review of all covered health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders conditions in children, adolescents, and adults, a health care service plan shall apply the criteria and guidelines set forth in the most recent versions of the treatment criteria developed by the nonprofit professional association for the relevant clinical specialty.(c) In conducting utilization review involving level of care placement decisions or any other patient care decisions that are within the scope of the sources specified in subdivision (b), a health care service plan shall not apply different, additional, conflicting, or more restrictive utilization review criteria than the criteria and guidelines set forth in those sources. This subdivision does not prohibit a health care service plan from applying utilization review criteria to health care services and benefits for mental health and substance use disorders conditions that meet either of the following criteria:(1) Are outside the scope of the criteria and guidelines set forth in the sources specified in subdivision (b), provided the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).(2) Relate to advancements in technology or types of care that are not covered in the most recent versions of the sources specified in subdivision (b), provided that the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).(d) If a health care service plan purchases or licenses utilization review criteria pursuant to paragraph (1) or (2) of subdivision (c), the plan shall verify and document before use that the criteria were developed in accordance with paragraph (1) of subdivision (a).(e) To ensure the proper use of the criteria described in subdivision subdivisions (a) and (b), every health care service plan shall do all of the following:(1) Sponsor a formal education program by nonprofit clinical specialty associations associations, including, but not limited to, the American Society of Addiction Medicine, to educate the health care service plans staff, including any third parties contracted with the health care service plan to review claims, conduct utilization reviews, or make medical necessity determinations about the clinical review criteria.(2) Make the education program available to other stakeholders, including the health care service plans participating providers and covered lives. Participating providers shall not be required to participate in the education program.(3) Provide, at no cost, the clinical review criteria and any training material or resources to providers and health care service plan enrollees.(4) Track, identify, and analyze how the clinical review criteria are used to certify care, deny care, and support the appeals process.(5) Conduct interrater reliability testing to ensure consistency in utilization review decisionmaking covering how medical necessity decisions are made. This assessment shall cover all aspects of utilization review as defined in paragraph (3) of subdivision (f).(6) Run interrater reliability reports about how the clinical guidelines are used in conjunction with the utilization management process and parity compliance activities.(7) Achieve interrater reliability pass rates of at least 90 percent and, if this threshold is not met, immediately provide for the remediation of poor interrater reliability and interrater reliability testing for all new staff before they can conduct utilization review without supervision.(f) The following definitions apply for purposes of this section:(1) (A) Generally accepted standards of mental health and substance use disorder care means standards of care and clinical practice that are generally recognized by health care providers practicing in relevant clinical specialties such as specialties, including psychiatry, psychology, clinical sociology, addiction medicine and counseling, and behavioral health treatment pursuant to Section 1374.73. Valid, evidence-based sources establishing generally accepted standards of mental health and substance use disorder care include peer-reviewed scientific studies and medical literature, clinical practice guidelines and recommendations of nonprofit health care provider professional associations, specialty societies and federal government agencies, and drug labeling approved by the United States Food and Drug Administration.(B) Generally accepted standards of substance use disorder care means the patient placement criteria established by the American Society of Addiction Medicine.(2) Mental health and substance use disorders has the same meaning as defined in paragraph (2) of subdivision (a) of Section 1374.72.(3) Utilization review means either of the following:(A) Prospectively, retrospectively, or concurrently reviewing and approving, modifying, delaying, or denying, based in whole or in part on medical necessity, requests by health care providers, enrollees, or their authorized representatives for coverage of health care services prior to, retrospectively or concurrent with the provision of health care services to enrollees.(B) Evaluating the medical necessity, appropriateness, level of care, service intensity, efficacy, or efficiency of health care services, benefits, procedures, or settings, under any circumstances, to determine whether a health care service or benefit subject to a medical necessity coverage requirement in a health care service plan contract is covered as medically necessary for an enrollee.(4) Utilization review criteria means any criteria, standards, protocols, or guidelines used by a health care service plan to conduct utilization review.(g) This section applies to all health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders covered by a health care service plan contract, including prescription drugs.(h) This section applies to a health care service plan that conducts utilization review as defined in this section, and any entity or contracting provider that performs utilization review or utilization management functions on behalf of a health care service plan.(i) The director may assess administrative penalties for violations of this section as provided for in Section 1368.04, in addition to any other remedies permitted by law.(j) A health care service plan shall not adopt, impose, or enforce terms in its plan contracts or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.(k) (1) The utilization review process and utilization review criteria for mental health and substance use disorder care used by a health care service plan, or an entity acting on its behalf, shall be accredited by an independent, nonprofit organization on or before July 1, 2023, and the health care service plan, or the entity acting on its behalf, shall maintain an active accreditation while providing utilization review services.(2) The director shall adopt rules to govern the selection of an independent, nonprofit organization to provide the accreditation services. Until those rules are adopted, the director shall designate the Utilization Review Accreditation Commission as the accrediting organization.(3) The accreditation shall certify that the utilization review process includes specific criteria, including, but not limited to, all of the following:(A) Issuing utilization review decisions in a timely manner.(B) The appropriate scope of medical material used in issuing a utilization review decision.(C) Conducting peer-to-peer consultation.(D) Providing for an internal appeals procedure.(E) Implementing a policy that prohibits physicians, surgeons, and other providers from receiving an incentive based on the utilization review decision.(4) The director shall adopt rules that require additional specific criteria for accrediting a utilization review process, including, but not limited to, all of the following:(A) A physician and surgeon providing utilization review services shall hold an unrestricted license to practice medicine in this state issued pursuant to Section 2050 of the Business and Professions Code or issued by the Osteopathic Medical Board of California under the Osteopathic Act.(B) The health care service plan, or an entity acting on the plans behalf, shall maintain telephone access during California business hours for physicians and surgeons to request authorization for mental health and substance use disorder care and conduct peer-to-peer discussions regarding issues, including the appropriateness of a requested treatment, modification of a treatment request, or obtaining additional information needed to make a medical necessity determination.(C) The health care service plan, or an entity acting on the plans behalf, shall disclose any financial conflict of interest between the health care service plan, or the entity acting on the plans behalf, and any other contracting entity that may impact the medical necessity determination.(D) A physician and surgeon providing utilization review services shall disclose to the treating provider the total number of reviews conducted and the percentage of services approved and denied.(l) If a utilization review request or appeal is filed regarding the medical necessity of a substance use disorder treatment or service, there is a rebuttable presumption that the treatment or service recommended by a physician and surgeon credentialed by the American Society of Addiction Medicine or the California Society of Addiction Medicine is medically necessary.(k)(m) This section does not apply to contracts entered into pursuant to Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code, between the State Department of Health Care Services and a health care service plan for enrolled Medi-Cal beneficiaries.
SEC. 4. Section 1374.721 of the Health and Safety Code is amended to read:
### SEC. 4.
1374.721. (a) (1) A health care service plan that provides hospital, medical, or surgical coverage shall base any medical necessity determination or the utilization review criteria that the plan, and any entity acting on the plans behalf, applies to determine the medical necessity of health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders on current generally accepted standards of mental health and substance use disorder care.(2) A health care service plan, and any entity acting on the plans behalf, shall not use any criteria in addition to the generally accepted standards of substance use disorder, as defined in subparagraph (B) of paragraph (1) of subdivision (f), to make a medical necessity determination, or for the utilization review criteria, for health care services and benefits for the diagnosis, prevention, and treatment of substance use disorders.(b) In conducting utilization review of all covered health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders conditions in children, adolescents, and adults, a health care service plan shall apply the criteria and guidelines set forth in the most recent versions of the treatment criteria developed by the nonprofit professional association for the relevant clinical specialty.(c) In conducting utilization review involving level of care placement decisions or any other patient care decisions that are within the scope of the sources specified in subdivision (b), a health care service plan shall not apply different, additional, conflicting, or more restrictive utilization review criteria than the criteria and guidelines set forth in those sources. This subdivision does not prohibit a health care service plan from applying utilization review criteria to health care services and benefits for mental health and substance use disorders conditions that meet either of the following criteria:(1) Are outside the scope of the criteria and guidelines set forth in the sources specified in subdivision (b), provided the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).(2) Relate to advancements in technology or types of care that are not covered in the most recent versions of the sources specified in subdivision (b), provided that the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).(d) If a health care service plan purchases or licenses utilization review criteria pursuant to paragraph (1) or (2) of subdivision (c), the plan shall verify and document before use that the criteria were developed in accordance with paragraph (1) of subdivision (a).(e) To ensure the proper use of the criteria described in subdivision subdivisions (a) and (b), every health care service plan shall do all of the following:(1) Sponsor a formal education program by nonprofit clinical specialty associations associations, including, but not limited to, the American Society of Addiction Medicine, to educate the health care service plans staff, including any third parties contracted with the health care service plan to review claims, conduct utilization reviews, or make medical necessity determinations about the clinical review criteria.(2) Make the education program available to other stakeholders, including the health care service plans participating providers and covered lives. Participating providers shall not be required to participate in the education program.(3) Provide, at no cost, the clinical review criteria and any training material or resources to providers and health care service plan enrollees.(4) Track, identify, and analyze how the clinical review criteria are used to certify care, deny care, and support the appeals process.(5) Conduct interrater reliability testing to ensure consistency in utilization review decisionmaking covering how medical necessity decisions are made. This assessment shall cover all aspects of utilization review as defined in paragraph (3) of subdivision (f).(6) Run interrater reliability reports about how the clinical guidelines are used in conjunction with the utilization management process and parity compliance activities.(7) Achieve interrater reliability pass rates of at least 90 percent and, if this threshold is not met, immediately provide for the remediation of poor interrater reliability and interrater reliability testing for all new staff before they can conduct utilization review without supervision.(f) The following definitions apply for purposes of this section:(1) (A) Generally accepted standards of mental health and substance use disorder care means standards of care and clinical practice that are generally recognized by health care providers practicing in relevant clinical specialties such as specialties, including psychiatry, psychology, clinical sociology, addiction medicine and counseling, and behavioral health treatment pursuant to Section 1374.73. Valid, evidence-based sources establishing generally accepted standards of mental health and substance use disorder care include peer-reviewed scientific studies and medical literature, clinical practice guidelines and recommendations of nonprofit health care provider professional associations, specialty societies and federal government agencies, and drug labeling approved by the United States Food and Drug Administration.(B) Generally accepted standards of substance use disorder care means the patient placement criteria established by the American Society of Addiction Medicine.(2) Mental health and substance use disorders has the same meaning as defined in paragraph (2) of subdivision (a) of Section 1374.72.(3) Utilization review means either of the following:(A) Prospectively, retrospectively, or concurrently reviewing and approving, modifying, delaying, or denying, based in whole or in part on medical necessity, requests by health care providers, enrollees, or their authorized representatives for coverage of health care services prior to, retrospectively or concurrent with the provision of health care services to enrollees.(B) Evaluating the medical necessity, appropriateness, level of care, service intensity, efficacy, or efficiency of health care services, benefits, procedures, or settings, under any circumstances, to determine whether a health care service or benefit subject to a medical necessity coverage requirement in a health care service plan contract is covered as medically necessary for an enrollee.(4) Utilization review criteria means any criteria, standards, protocols, or guidelines used by a health care service plan to conduct utilization review.(g) This section applies to all health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders covered by a health care service plan contract, including prescription drugs.(h) This section applies to a health care service plan that conducts utilization review as defined in this section, and any entity or contracting provider that performs utilization review or utilization management functions on behalf of a health care service plan.(i) The director may assess administrative penalties for violations of this section as provided for in Section 1368.04, in addition to any other remedies permitted by law.(j) A health care service plan shall not adopt, impose, or enforce terms in its plan contracts or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.(k) (1) The utilization review process and utilization review criteria for mental health and substance use disorder care used by a health care service plan, or an entity acting on its behalf, shall be accredited by an independent, nonprofit organization on or before July 1, 2023, and the health care service plan, or the entity acting on its behalf, shall maintain an active accreditation while providing utilization review services.(2) The director shall adopt rules to govern the selection of an independent, nonprofit organization to provide the accreditation services. Until those rules are adopted, the director shall designate the Utilization Review Accreditation Commission as the accrediting organization.(3) The accreditation shall certify that the utilization review process includes specific criteria, including, but not limited to, all of the following:(A) Issuing utilization review decisions in a timely manner.(B) The appropriate scope of medical material used in issuing a utilization review decision.(C) Conducting peer-to-peer consultation.(D) Providing for an internal appeals procedure.(E) Implementing a policy that prohibits physicians, surgeons, and other providers from receiving an incentive based on the utilization review decision.(4) The director shall adopt rules that require additional specific criteria for accrediting a utilization review process, including, but not limited to, all of the following:(A) A physician and surgeon providing utilization review services shall hold an unrestricted license to practice medicine in this state issued pursuant to Section 2050 of the Business and Professions Code or issued by the Osteopathic Medical Board of California under the Osteopathic Act.(B) The health care service plan, or an entity acting on the plans behalf, shall maintain telephone access during California business hours for physicians and surgeons to request authorization for mental health and substance use disorder care and conduct peer-to-peer discussions regarding issues, including the appropriateness of a requested treatment, modification of a treatment request, or obtaining additional information needed to make a medical necessity determination.(C) The health care service plan, or an entity acting on the plans behalf, shall disclose any financial conflict of interest between the health care service plan, or the entity acting on the plans behalf, and any other contracting entity that may impact the medical necessity determination.(D) A physician and surgeon providing utilization review services shall disclose to the treating provider the total number of reviews conducted and the percentage of services approved and denied.(l) If a utilization review request or appeal is filed regarding the medical necessity of a substance use disorder treatment or service, there is a rebuttable presumption that the treatment or service recommended by a physician and surgeon credentialed by the American Society of Addiction Medicine or the California Society of Addiction Medicine is medically necessary.(k)(m) This section does not apply to contracts entered into pursuant to Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code, between the State Department of Health Care Services and a health care service plan for enrolled Medi-Cal beneficiaries.
1374.721. (a) (1) A health care service plan that provides hospital, medical, or surgical coverage shall base any medical necessity determination or the utilization review criteria that the plan, and any entity acting on the plans behalf, applies to determine the medical necessity of health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders on current generally accepted standards of mental health and substance use disorder care.(2) A health care service plan, and any entity acting on the plans behalf, shall not use any criteria in addition to the generally accepted standards of substance use disorder, as defined in subparagraph (B) of paragraph (1) of subdivision (f), to make a medical necessity determination, or for the utilization review criteria, for health care services and benefits for the diagnosis, prevention, and treatment of substance use disorders.(b) In conducting utilization review of all covered health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders conditions in children, adolescents, and adults, a health care service plan shall apply the criteria and guidelines set forth in the most recent versions of the treatment criteria developed by the nonprofit professional association for the relevant clinical specialty.(c) In conducting utilization review involving level of care placement decisions or any other patient care decisions that are within the scope of the sources specified in subdivision (b), a health care service plan shall not apply different, additional, conflicting, or more restrictive utilization review criteria than the criteria and guidelines set forth in those sources. This subdivision does not prohibit a health care service plan from applying utilization review criteria to health care services and benefits for mental health and substance use disorders conditions that meet either of the following criteria:(1) Are outside the scope of the criteria and guidelines set forth in the sources specified in subdivision (b), provided the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).(2) Relate to advancements in technology or types of care that are not covered in the most recent versions of the sources specified in subdivision (b), provided that the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).(d) If a health care service plan purchases or licenses utilization review criteria pursuant to paragraph (1) or (2) of subdivision (c), the plan shall verify and document before use that the criteria were developed in accordance with paragraph (1) of subdivision (a).(e) To ensure the proper use of the criteria described in subdivision subdivisions (a) and (b), every health care service plan shall do all of the following:(1) Sponsor a formal education program by nonprofit clinical specialty associations associations, including, but not limited to, the American Society of Addiction Medicine, to educate the health care service plans staff, including any third parties contracted with the health care service plan to review claims, conduct utilization reviews, or make medical necessity determinations about the clinical review criteria.(2) Make the education program available to other stakeholders, including the health care service plans participating providers and covered lives. Participating providers shall not be required to participate in the education program.(3) Provide, at no cost, the clinical review criteria and any training material or resources to providers and health care service plan enrollees.(4) Track, identify, and analyze how the clinical review criteria are used to certify care, deny care, and support the appeals process.(5) Conduct interrater reliability testing to ensure consistency in utilization review decisionmaking covering how medical necessity decisions are made. This assessment shall cover all aspects of utilization review as defined in paragraph (3) of subdivision (f).(6) Run interrater reliability reports about how the clinical guidelines are used in conjunction with the utilization management process and parity compliance activities.(7) Achieve interrater reliability pass rates of at least 90 percent and, if this threshold is not met, immediately provide for the remediation of poor interrater reliability and interrater reliability testing for all new staff before they can conduct utilization review without supervision.(f) The following definitions apply for purposes of this section:(1) (A) Generally accepted standards of mental health and substance use disorder care means standards of care and clinical practice that are generally recognized by health care providers practicing in relevant clinical specialties such as specialties, including psychiatry, psychology, clinical sociology, addiction medicine and counseling, and behavioral health treatment pursuant to Section 1374.73. Valid, evidence-based sources establishing generally accepted standards of mental health and substance use disorder care include peer-reviewed scientific studies and medical literature, clinical practice guidelines and recommendations of nonprofit health care provider professional associations, specialty societies and federal government agencies, and drug labeling approved by the United States Food and Drug Administration.(B) Generally accepted standards of substance use disorder care means the patient placement criteria established by the American Society of Addiction Medicine.(2) Mental health and substance use disorders has the same meaning as defined in paragraph (2) of subdivision (a) of Section 1374.72.(3) Utilization review means either of the following:(A) Prospectively, retrospectively, or concurrently reviewing and approving, modifying, delaying, or denying, based in whole or in part on medical necessity, requests by health care providers, enrollees, or their authorized representatives for coverage of health care services prior to, retrospectively or concurrent with the provision of health care services to enrollees.(B) Evaluating the medical necessity, appropriateness, level of care, service intensity, efficacy, or efficiency of health care services, benefits, procedures, or settings, under any circumstances, to determine whether a health care service or benefit subject to a medical necessity coverage requirement in a health care service plan contract is covered as medically necessary for an enrollee.(4) Utilization review criteria means any criteria, standards, protocols, or guidelines used by a health care service plan to conduct utilization review.(g) This section applies to all health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders covered by a health care service plan contract, including prescription drugs.(h) This section applies to a health care service plan that conducts utilization review as defined in this section, and any entity or contracting provider that performs utilization review or utilization management functions on behalf of a health care service plan.(i) The director may assess administrative penalties for violations of this section as provided for in Section 1368.04, in addition to any other remedies permitted by law.(j) A health care service plan shall not adopt, impose, or enforce terms in its plan contracts or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.(k) (1) The utilization review process and utilization review criteria for mental health and substance use disorder care used by a health care service plan, or an entity acting on its behalf, shall be accredited by an independent, nonprofit organization on or before July 1, 2023, and the health care service plan, or the entity acting on its behalf, shall maintain an active accreditation while providing utilization review services.(2) The director shall adopt rules to govern the selection of an independent, nonprofit organization to provide the accreditation services. Until those rules are adopted, the director shall designate the Utilization Review Accreditation Commission as the accrediting organization.(3) The accreditation shall certify that the utilization review process includes specific criteria, including, but not limited to, all of the following:(A) Issuing utilization review decisions in a timely manner.(B) The appropriate scope of medical material used in issuing a utilization review decision.(C) Conducting peer-to-peer consultation.(D) Providing for an internal appeals procedure.(E) Implementing a policy that prohibits physicians, surgeons, and other providers from receiving an incentive based on the utilization review decision.(4) The director shall adopt rules that require additional specific criteria for accrediting a utilization review process, including, but not limited to, all of the following:(A) A physician and surgeon providing utilization review services shall hold an unrestricted license to practice medicine in this state issued pursuant to Section 2050 of the Business and Professions Code or issued by the Osteopathic Medical Board of California under the Osteopathic Act.(B) The health care service plan, or an entity acting on the plans behalf, shall maintain telephone access during California business hours for physicians and surgeons to request authorization for mental health and substance use disorder care and conduct peer-to-peer discussions regarding issues, including the appropriateness of a requested treatment, modification of a treatment request, or obtaining additional information needed to make a medical necessity determination.(C) The health care service plan, or an entity acting on the plans behalf, shall disclose any financial conflict of interest between the health care service plan, or the entity acting on the plans behalf, and any other contracting entity that may impact the medical necessity determination.(D) A physician and surgeon providing utilization review services shall disclose to the treating provider the total number of reviews conducted and the percentage of services approved and denied.(l) If a utilization review request or appeal is filed regarding the medical necessity of a substance use disorder treatment or service, there is a rebuttable presumption that the treatment or service recommended by a physician and surgeon credentialed by the American Society of Addiction Medicine or the California Society of Addiction Medicine is medically necessary.(k)(m) This section does not apply to contracts entered into pursuant to Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code, between the State Department of Health Care Services and a health care service plan for enrolled Medi-Cal beneficiaries.
1374.721. (a) (1) A health care service plan that provides hospital, medical, or surgical coverage shall base any medical necessity determination or the utilization review criteria that the plan, and any entity acting on the plans behalf, applies to determine the medical necessity of health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders on current generally accepted standards of mental health and substance use disorder care.(2) A health care service plan, and any entity acting on the plans behalf, shall not use any criteria in addition to the generally accepted standards of substance use disorder, as defined in subparagraph (B) of paragraph (1) of subdivision (f), to make a medical necessity determination, or for the utilization review criteria, for health care services and benefits for the diagnosis, prevention, and treatment of substance use disorders.(b) In conducting utilization review of all covered health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders conditions in children, adolescents, and adults, a health care service plan shall apply the criteria and guidelines set forth in the most recent versions of the treatment criteria developed by the nonprofit professional association for the relevant clinical specialty.(c) In conducting utilization review involving level of care placement decisions or any other patient care decisions that are within the scope of the sources specified in subdivision (b), a health care service plan shall not apply different, additional, conflicting, or more restrictive utilization review criteria than the criteria and guidelines set forth in those sources. This subdivision does not prohibit a health care service plan from applying utilization review criteria to health care services and benefits for mental health and substance use disorders conditions that meet either of the following criteria:(1) Are outside the scope of the criteria and guidelines set forth in the sources specified in subdivision (b), provided the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).(2) Relate to advancements in technology or types of care that are not covered in the most recent versions of the sources specified in subdivision (b), provided that the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).(d) If a health care service plan purchases or licenses utilization review criteria pursuant to paragraph (1) or (2) of subdivision (c), the plan shall verify and document before use that the criteria were developed in accordance with paragraph (1) of subdivision (a).(e) To ensure the proper use of the criteria described in subdivision subdivisions (a) and (b), every health care service plan shall do all of the following:(1) Sponsor a formal education program by nonprofit clinical specialty associations associations, including, but not limited to, the American Society of Addiction Medicine, to educate the health care service plans staff, including any third parties contracted with the health care service plan to review claims, conduct utilization reviews, or make medical necessity determinations about the clinical review criteria.(2) Make the education program available to other stakeholders, including the health care service plans participating providers and covered lives. Participating providers shall not be required to participate in the education program.(3) Provide, at no cost, the clinical review criteria and any training material or resources to providers and health care service plan enrollees.(4) Track, identify, and analyze how the clinical review criteria are used to certify care, deny care, and support the appeals process.(5) Conduct interrater reliability testing to ensure consistency in utilization review decisionmaking covering how medical necessity decisions are made. This assessment shall cover all aspects of utilization review as defined in paragraph (3) of subdivision (f).(6) Run interrater reliability reports about how the clinical guidelines are used in conjunction with the utilization management process and parity compliance activities.(7) Achieve interrater reliability pass rates of at least 90 percent and, if this threshold is not met, immediately provide for the remediation of poor interrater reliability and interrater reliability testing for all new staff before they can conduct utilization review without supervision.(f) The following definitions apply for purposes of this section:(1) (A) Generally accepted standards of mental health and substance use disorder care means standards of care and clinical practice that are generally recognized by health care providers practicing in relevant clinical specialties such as specialties, including psychiatry, psychology, clinical sociology, addiction medicine and counseling, and behavioral health treatment pursuant to Section 1374.73. Valid, evidence-based sources establishing generally accepted standards of mental health and substance use disorder care include peer-reviewed scientific studies and medical literature, clinical practice guidelines and recommendations of nonprofit health care provider professional associations, specialty societies and federal government agencies, and drug labeling approved by the United States Food and Drug Administration.(B) Generally accepted standards of substance use disorder care means the patient placement criteria established by the American Society of Addiction Medicine.(2) Mental health and substance use disorders has the same meaning as defined in paragraph (2) of subdivision (a) of Section 1374.72.(3) Utilization review means either of the following:(A) Prospectively, retrospectively, or concurrently reviewing and approving, modifying, delaying, or denying, based in whole or in part on medical necessity, requests by health care providers, enrollees, or their authorized representatives for coverage of health care services prior to, retrospectively or concurrent with the provision of health care services to enrollees.(B) Evaluating the medical necessity, appropriateness, level of care, service intensity, efficacy, or efficiency of health care services, benefits, procedures, or settings, under any circumstances, to determine whether a health care service or benefit subject to a medical necessity coverage requirement in a health care service plan contract is covered as medically necessary for an enrollee.(4) Utilization review criteria means any criteria, standards, protocols, or guidelines used by a health care service plan to conduct utilization review.(g) This section applies to all health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders covered by a health care service plan contract, including prescription drugs.(h) This section applies to a health care service plan that conducts utilization review as defined in this section, and any entity or contracting provider that performs utilization review or utilization management functions on behalf of a health care service plan.(i) The director may assess administrative penalties for violations of this section as provided for in Section 1368.04, in addition to any other remedies permitted by law.(j) A health care service plan shall not adopt, impose, or enforce terms in its plan contracts or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.(k) (1) The utilization review process and utilization review criteria for mental health and substance use disorder care used by a health care service plan, or an entity acting on its behalf, shall be accredited by an independent, nonprofit organization on or before July 1, 2023, and the health care service plan, or the entity acting on its behalf, shall maintain an active accreditation while providing utilization review services.(2) The director shall adopt rules to govern the selection of an independent, nonprofit organization to provide the accreditation services. Until those rules are adopted, the director shall designate the Utilization Review Accreditation Commission as the accrediting organization.(3) The accreditation shall certify that the utilization review process includes specific criteria, including, but not limited to, all of the following:(A) Issuing utilization review decisions in a timely manner.(B) The appropriate scope of medical material used in issuing a utilization review decision.(C) Conducting peer-to-peer consultation.(D) Providing for an internal appeals procedure.(E) Implementing a policy that prohibits physicians, surgeons, and other providers from receiving an incentive based on the utilization review decision.(4) The director shall adopt rules that require additional specific criteria for accrediting a utilization review process, including, but not limited to, all of the following:(A) A physician and surgeon providing utilization review services shall hold an unrestricted license to practice medicine in this state issued pursuant to Section 2050 of the Business and Professions Code or issued by the Osteopathic Medical Board of California under the Osteopathic Act.(B) The health care service plan, or an entity acting on the plans behalf, shall maintain telephone access during California business hours for physicians and surgeons to request authorization for mental health and substance use disorder care and conduct peer-to-peer discussions regarding issues, including the appropriateness of a requested treatment, modification of a treatment request, or obtaining additional information needed to make a medical necessity determination.(C) The health care service plan, or an entity acting on the plans behalf, shall disclose any financial conflict of interest between the health care service plan, or the entity acting on the plans behalf, and any other contracting entity that may impact the medical necessity determination.(D) A physician and surgeon providing utilization review services shall disclose to the treating provider the total number of reviews conducted and the percentage of services approved and denied.(l) If a utilization review request or appeal is filed regarding the medical necessity of a substance use disorder treatment or service, there is a rebuttable presumption that the treatment or service recommended by a physician and surgeon credentialed by the American Society of Addiction Medicine or the California Society of Addiction Medicine is medically necessary.(k)(m) This section does not apply to contracts entered into pursuant to Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code, between the State Department of Health Care Services and a health care service plan for enrolled Medi-Cal beneficiaries.
1374.721. (a) (1) A health care service plan that provides hospital, medical, or surgical coverage shall base any medical necessity determination or the utilization review criteria that the plan, and any entity acting on the plans behalf, applies to determine the medical necessity of health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders on current generally accepted standards of mental health and substance use disorder care.
(2) A health care service plan, and any entity acting on the plans behalf, shall not use any criteria in addition to the generally accepted standards of substance use disorder, as defined in subparagraph (B) of paragraph (1) of subdivision (f), to make a medical necessity determination, or for the utilization review criteria, for health care services and benefits for the diagnosis, prevention, and treatment of substance use disorders.
(b) In conducting utilization review of all covered health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders conditions in children, adolescents, and adults, a health care service plan shall apply the criteria and guidelines set forth in the most recent versions of the treatment criteria developed by the nonprofit professional association for the relevant clinical specialty.
(c) In conducting utilization review involving level of care placement decisions or any other patient care decisions that are within the scope of the sources specified in subdivision (b), a health care service plan shall not apply different, additional, conflicting, or more restrictive utilization review criteria than the criteria and guidelines set forth in those sources. This subdivision does not prohibit a health care service plan from applying utilization review criteria to health care services and benefits for mental health and substance use disorders conditions that meet either of the following criteria:
(1) Are outside the scope of the criteria and guidelines set forth in the sources specified in subdivision (b), provided the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).
(2) Relate to advancements in technology or types of care that are not covered in the most recent versions of the sources specified in subdivision (b), provided that the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).
(d) If a health care service plan purchases or licenses utilization review criteria pursuant to paragraph (1) or (2) of subdivision (c), the plan shall verify and document before use that the criteria were developed in accordance with paragraph (1) of subdivision (a).
(e) To ensure the proper use of the criteria described in subdivision subdivisions (a) and (b), every health care service plan shall do all of the following:
(1) Sponsor a formal education program by nonprofit clinical specialty associations associations, including, but not limited to, the American Society of Addiction Medicine, to educate the health care service plans staff, including any third parties contracted with the health care service plan to review claims, conduct utilization reviews, or make medical necessity determinations about the clinical review criteria.
(2) Make the education program available to other stakeholders, including the health care service plans participating providers and covered lives. Participating providers shall not be required to participate in the education program.
(3) Provide, at no cost, the clinical review criteria and any training material or resources to providers and health care service plan enrollees.
(4) Track, identify, and analyze how the clinical review criteria are used to certify care, deny care, and support the appeals process.
(5) Conduct interrater reliability testing to ensure consistency in utilization review decisionmaking covering how medical necessity decisions are made. This assessment shall cover all aspects of utilization review as defined in paragraph (3) of subdivision (f).
(6) Run interrater reliability reports about how the clinical guidelines are used in conjunction with the utilization management process and parity compliance activities.
(7) Achieve interrater reliability pass rates of at least 90 percent and, if this threshold is not met, immediately provide for the remediation of poor interrater reliability and interrater reliability testing for all new staff before they can conduct utilization review without supervision.
(f) The following definitions apply for purposes of this section:
(1) (A) Generally accepted standards of mental health and substance use disorder care means standards of care and clinical practice that are generally recognized by health care providers practicing in relevant clinical specialties such as specialties, including psychiatry, psychology, clinical sociology, addiction medicine and counseling, and behavioral health treatment pursuant to Section 1374.73. Valid, evidence-based sources establishing generally accepted standards of mental health and substance use disorder care include peer-reviewed scientific studies and medical literature, clinical practice guidelines and recommendations of nonprofit health care provider professional associations, specialty societies and federal government agencies, and drug labeling approved by the United States Food and Drug Administration.
(B) Generally accepted standards of substance use disorder care means the patient placement criteria established by the American Society of Addiction Medicine.
(2) Mental health and substance use disorders has the same meaning as defined in paragraph (2) of subdivision (a) of Section 1374.72.
(3) Utilization review means either of the following:
(A) Prospectively, retrospectively, or concurrently reviewing and approving, modifying, delaying, or denying, based in whole or in part on medical necessity, requests by health care providers, enrollees, or their authorized representatives for coverage of health care services prior to, retrospectively or concurrent with the provision of health care services to enrollees.
(B) Evaluating the medical necessity, appropriateness, level of care, service intensity, efficacy, or efficiency of health care services, benefits, procedures, or settings, under any circumstances, to determine whether a health care service or benefit subject to a medical necessity coverage requirement in a health care service plan contract is covered as medically necessary for an enrollee.
(4) Utilization review criteria means any criteria, standards, protocols, or guidelines used by a health care service plan to conduct utilization review.
(g) This section applies to all health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders covered by a health care service plan contract, including prescription drugs.
(h) This section applies to a health care service plan that conducts utilization review as defined in this section, and any entity or contracting provider that performs utilization review or utilization management functions on behalf of a health care service plan.
(i) The director may assess administrative penalties for violations of this section as provided for in Section 1368.04, in addition to any other remedies permitted by law.
(j) A health care service plan shall not adopt, impose, or enforce terms in its plan contracts or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.
(k) (1) The utilization review process and utilization review criteria for mental health and substance use disorder care used by a health care service plan, or an entity acting on its behalf, shall be accredited by an independent, nonprofit organization on or before July 1, 2023, and the health care service plan, or the entity acting on its behalf, shall maintain an active accreditation while providing utilization review services.
(2) The director shall adopt rules to govern the selection of an independent, nonprofit organization to provide the accreditation services. Until those rules are adopted, the director shall designate the Utilization Review Accreditation Commission as the accrediting organization.
(3) The accreditation shall certify that the utilization review process includes specific criteria, including, but not limited to, all of the following:
(A) Issuing utilization review decisions in a timely manner.
(B) The appropriate scope of medical material used in issuing a utilization review decision.
(C) Conducting peer-to-peer consultation.
(D) Providing for an internal appeals procedure.
(E) Implementing a policy that prohibits physicians, surgeons, and other providers from receiving an incentive based on the utilization review decision.
(4) The director shall adopt rules that require additional specific criteria for accrediting a utilization review process, including, but not limited to, all of the following:
(A) A physician and surgeon providing utilization review services shall hold an unrestricted license to practice medicine in this state issued pursuant to Section 2050 of the Business and Professions Code or issued by the Osteopathic Medical Board of California under the Osteopathic Act.
(B) The health care service plan, or an entity acting on the plans behalf, shall maintain telephone access during California business hours for physicians and surgeons to request authorization for mental health and substance use disorder care and conduct peer-to-peer discussions regarding issues, including the appropriateness of a requested treatment, modification of a treatment request, or obtaining additional information needed to make a medical necessity determination.
(C) The health care service plan, or an entity acting on the plans behalf, shall disclose any financial conflict of interest between the health care service plan, or the entity acting on the plans behalf, and any other contracting entity that may impact the medical necessity determination.
(D) A physician and surgeon providing utilization review services shall disclose to the treating provider the total number of reviews conducted and the percentage of services approved and denied.
(l) If a utilization review request or appeal is filed regarding the medical necessity of a substance use disorder treatment or service, there is a rebuttable presumption that the treatment or service recommended by a physician and surgeon credentialed by the American Society of Addiction Medicine or the California Society of Addiction Medicine is medically necessary.
(k)
(m) This section does not apply to contracts entered into pursuant to Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code, between the State Department of Health Care Services and a health care service plan for enrolled Medi-Cal beneficiaries.
SEC. 5. Section 10144.5 of the Insurance Code is amended to read:10144.5. (a) (1) Every disability insurance policy issued, amended, or renewed on or after January 1, 2021, that provides hospital, medical, or surgical coverage shall provide coverage for medically necessary treatment of mental health and substance use disorders, under the same terms and conditions applied to other medical conditions as specified in subdivision (c).(2) For purposes of this section, mental health and substance use disorders means a mental health condition or substance use disorder that falls under any of the diagnostic categories listed in the mental and behavioral disorders chapter of the most recent edition of the World Health Organizations International Statistical Classification of Diseases and Related Health Problems, or that is listed in the most recent version of the American Psychiatric Associations Diagnostic and Statistical Manual of Mental Disorders. Changes in terminology, organization, or classification of mental health and substance use disorders in future versions of the American Psychiatric Associations Diagnostic and Statistical Manual of Mental Disorders or the World Health Organizations International Statistical Classification of Diseases and Related Health Problems shall not affect the conditions covered by this section as long as a condition is commonly understood to be a mental health or substance use disorder by health care providers practicing in relevant clinical specialties.(3) (A) For purposes of this section, medically necessary treatment of a mental health or substance use disorder means a service or product addressing the specific needs of that patient, for the purpose of preventing, diagnosing, or treating an illness, injury, condition, or its symptoms, including minimizing the progression of an illness, injury, condition, or its symptoms, in a manner that is all of the following:(i) In accordance with the generally accepted standards of mental health and substance use disorder care.(ii) Clinically appropriate in terms of type, frequency, extent, site, and duration.(iii) Not primarily for the economic benefit of the disability insurer and insureds or for the convenience of the patient, treating physician, or other health care provider.(B) This paragraph does not limit in any way the independent medical review rights of an insured or policyholder under this chapter.(4) Health care provider means any of the following:(A) A person who is licensed under Division 2 (commencing with Section 500) of the Business and Professions Code.(B) An associate marriage and family therapist or marriage and family therapist trainee functioning pursuant to Section 4980.43.3 of the Business and Professions Code.(C) A qualified autism service provider or qualified autism service professional certified by a national entity pursuant to Section 1374.73 of the Health and Safety Code and Section 10144.51.(D) An associate clinical social worker functioning pursuant to Section 4996.23.2 of the Business and Professions Code.(E) An associate professional clinical counselor or professional clinical counselor trainee functioning pursuant to Section 4999.46.3 of the Business and Professions Code.(F) A registered psychologist, as described in Section 2909.5 of the Business and Professions Code.(G) A registered psychological assistant, as described in Section 2913 of the Business and Professions Code.(H) A psychology trainee or person supervised as set forth in Section 2910 or 2911 of, or subdivision (d) of Section 2914 of, the Business and Professions Code.(5) For purposes of this section, generally accepted standards of mental health and substance use disorder care has the same meaning means the generally accepted standards of mental health care and the generally accepted standards of substance use disorder care as defined in subparagraphs (A) and (B) of paragraph (1) of subdivision (f) of Section 10144.52.(6) A disability insurer shall not limit benefits or coverage for mental health and substance use disorders to short-term or acute treatment.(7) All medical necessity determinations made by the disability insurer concerning service intensity, level of care placement, continued stay, and transfer or discharge of insureds diagnosed with mental health and substance use disorders shall be conducted in accordance with the requirements of Section 10144.52.(8) A disability insurer that authorizes a specific type of treatment by a provider pursuant to this section shall not rescind or modify the authorization after the provider renders the health care service in good faith and pursuant to this authorization for any reason, including, but not limited to, the insurers subsequent rescission, cancellation, or modification of the insureds or policyholders contract, or the insurers subsequent determination that it did not make an accurate determination of the insureds or policyholders eligibility. This section shall not be construed to expand or alter the benefits available to the insured or policyholder under an insurance policy.(b) The benefits that shall be covered pursuant to this section shall include, but not be limited to, the following:(1) Basic health care services, as defined in subdivision (b) of Section 1345 of the Health and Safety Code.(2) Intermediate services, including the full range of levels of care, including, but not limited to, residential treatment, partial hospitalization, and intensive outpatient treatment.(3) Prescription drugs, if the policy includes coverage for prescription drugs.(c) The terms and conditions applied to the benefits required by this section, that shall be applied equally to all benefits under the disability insurance policy shall include, but not be limited to, all of the following patient financial responsibilities:(1) Maximum and annual lifetime benefits, if not prohibited by applicable law.(2) Copayments and coinsurance.(3) Individual and family deductibles.(4) Out-of-pocket maximums.(d) If services for the medically necessary treatment of a mental health or substance use disorder are not available in network within the geographic and timely access standards set by law or regulation, the disability insurer shall arrange coverage to ensure the delivery of medically necessary out-of-network services and any medically necessary followup services that, to the maximum extent possible, meet those geographic and timely access standards. As used in this subdivision, to arrange coverage to ensure the delivery of medically necessary out-of-network services includes, but is not limited to, providing services to secure medically necessary out-of-network options that are available to the insured within geographic and timely access standards. The insured shall pay no more than the same cost sharing that the insured would pay for the same covered services received from an in-network provider.(e) This section shall not apply to accident-only, specified disease, hospital indemnity, Medicare supplement, dental-only, or vision-only insurance policies.(f) (1) For the purpose of compliance with this section, a disability insurer may provide coverage for all or part of the mental health and substance use disorder services required by this section through a separate specialized health insurance policy or mental health policy. This paragraph shall not apply to policies that are subject to Section 10112.27.(2) A disability insurer shall provide the mental health and substance use disorder coverage required by this section in its entire service area and in emergency situations as may be required by applicable laws and regulations. For purposes of this section, disability insurance policies that provide benefits to insureds through preferred provider contracting arrangements are not precluded from requiring insureds who reside or work in geographic areas served by specialized health insurance policies or mental health insurance policies to secure all or part of their mental health services within those geographic areas served by specialized health insurance policies or mental health insurance policies, provided that all appropriate mental health or substance use disorder services are actually available within those geographic service areas within timeliness standards.(3) Notwithstanding any other law, in the provision of benefits required by this section, a disability insurer may utilize case management, network providers, utilization review techniques, prior authorization, copayments, or other cost sharing, provided that these practices are consistent with Section 10144.4 of this code, and Section 2052 of the Business and Professions Code.(g) This section shall not be construed to deny or restrict in any way the departments authority to ensure a disability insurers compliance with this code.(h) A disability insurer shall not limit benefits or coverage for medically necessary services on the basis that those services should be or could be covered by a public entitlement program, including, but not limited to, special education or an individualized education program, Medicaid, Medicare, Supplemental Security Income, or Social Security Disability Insurance, and shall not include or enforce a contract term that excludes otherwise covered benefits on the basis that those services should be or could be covered by a public entitlement program.(i) A disability insurer shall not adopt, impose, or enforce terms in its policies or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.(j) If the commissioner determines that a disability insurer has violated this section, the commissioner may, after appropriate notice and opportunity for hearing in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), by order, assess a civil penalty not to exceed five thousand dollars ($5,000) for each violation, or, if a violation was willful, a civil penalty not to exceed ten thousand dollars ($10,000) for each violation.
SEC. 5. Section 10144.5 of the Insurance Code is amended to read:
### SEC. 5.
10144.5. (a) (1) Every disability insurance policy issued, amended, or renewed on or after January 1, 2021, that provides hospital, medical, or surgical coverage shall provide coverage for medically necessary treatment of mental health and substance use disorders, under the same terms and conditions applied to other medical conditions as specified in subdivision (c).(2) For purposes of this section, mental health and substance use disorders means a mental health condition or substance use disorder that falls under any of the diagnostic categories listed in the mental and behavioral disorders chapter of the most recent edition of the World Health Organizations International Statistical Classification of Diseases and Related Health Problems, or that is listed in the most recent version of the American Psychiatric Associations Diagnostic and Statistical Manual of Mental Disorders. Changes in terminology, organization, or classification of mental health and substance use disorders in future versions of the American Psychiatric Associations Diagnostic and Statistical Manual of Mental Disorders or the World Health Organizations International Statistical Classification of Diseases and Related Health Problems shall not affect the conditions covered by this section as long as a condition is commonly understood to be a mental health or substance use disorder by health care providers practicing in relevant clinical specialties.(3) (A) For purposes of this section, medically necessary treatment of a mental health or substance use disorder means a service or product addressing the specific needs of that patient, for the purpose of preventing, diagnosing, or treating an illness, injury, condition, or its symptoms, including minimizing the progression of an illness, injury, condition, or its symptoms, in a manner that is all of the following:(i) In accordance with the generally accepted standards of mental health and substance use disorder care.(ii) Clinically appropriate in terms of type, frequency, extent, site, and duration.(iii) Not primarily for the economic benefit of the disability insurer and insureds or for the convenience of the patient, treating physician, or other health care provider.(B) This paragraph does not limit in any way the independent medical review rights of an insured or policyholder under this chapter.(4) Health care provider means any of the following:(A) A person who is licensed under Division 2 (commencing with Section 500) of the Business and Professions Code.(B) An associate marriage and family therapist or marriage and family therapist trainee functioning pursuant to Section 4980.43.3 of the Business and Professions Code.(C) A qualified autism service provider or qualified autism service professional certified by a national entity pursuant to Section 1374.73 of the Health and Safety Code and Section 10144.51.(D) An associate clinical social worker functioning pursuant to Section 4996.23.2 of the Business and Professions Code.(E) An associate professional clinical counselor or professional clinical counselor trainee functioning pursuant to Section 4999.46.3 of the Business and Professions Code.(F) A registered psychologist, as described in Section 2909.5 of the Business and Professions Code.(G) A registered psychological assistant, as described in Section 2913 of the Business and Professions Code.(H) A psychology trainee or person supervised as set forth in Section 2910 or 2911 of, or subdivision (d) of Section 2914 of, the Business and Professions Code.(5) For purposes of this section, generally accepted standards of mental health and substance use disorder care has the same meaning means the generally accepted standards of mental health care and the generally accepted standards of substance use disorder care as defined in subparagraphs (A) and (B) of paragraph (1) of subdivision (f) of Section 10144.52.(6) A disability insurer shall not limit benefits or coverage for mental health and substance use disorders to short-term or acute treatment.(7) All medical necessity determinations made by the disability insurer concerning service intensity, level of care placement, continued stay, and transfer or discharge of insureds diagnosed with mental health and substance use disorders shall be conducted in accordance with the requirements of Section 10144.52.(8) A disability insurer that authorizes a specific type of treatment by a provider pursuant to this section shall not rescind or modify the authorization after the provider renders the health care service in good faith and pursuant to this authorization for any reason, including, but not limited to, the insurers subsequent rescission, cancellation, or modification of the insureds or policyholders contract, or the insurers subsequent determination that it did not make an accurate determination of the insureds or policyholders eligibility. This section shall not be construed to expand or alter the benefits available to the insured or policyholder under an insurance policy.(b) The benefits that shall be covered pursuant to this section shall include, but not be limited to, the following:(1) Basic health care services, as defined in subdivision (b) of Section 1345 of the Health and Safety Code.(2) Intermediate services, including the full range of levels of care, including, but not limited to, residential treatment, partial hospitalization, and intensive outpatient treatment.(3) Prescription drugs, if the policy includes coverage for prescription drugs.(c) The terms and conditions applied to the benefits required by this section, that shall be applied equally to all benefits under the disability insurance policy shall include, but not be limited to, all of the following patient financial responsibilities:(1) Maximum and annual lifetime benefits, if not prohibited by applicable law.(2) Copayments and coinsurance.(3) Individual and family deductibles.(4) Out-of-pocket maximums.(d) If services for the medically necessary treatment of a mental health or substance use disorder are not available in network within the geographic and timely access standards set by law or regulation, the disability insurer shall arrange coverage to ensure the delivery of medically necessary out-of-network services and any medically necessary followup services that, to the maximum extent possible, meet those geographic and timely access standards. As used in this subdivision, to arrange coverage to ensure the delivery of medically necessary out-of-network services includes, but is not limited to, providing services to secure medically necessary out-of-network options that are available to the insured within geographic and timely access standards. The insured shall pay no more than the same cost sharing that the insured would pay for the same covered services received from an in-network provider.(e) This section shall not apply to accident-only, specified disease, hospital indemnity, Medicare supplement, dental-only, or vision-only insurance policies.(f) (1) For the purpose of compliance with this section, a disability insurer may provide coverage for all or part of the mental health and substance use disorder services required by this section through a separate specialized health insurance policy or mental health policy. This paragraph shall not apply to policies that are subject to Section 10112.27.(2) A disability insurer shall provide the mental health and substance use disorder coverage required by this section in its entire service area and in emergency situations as may be required by applicable laws and regulations. For purposes of this section, disability insurance policies that provide benefits to insureds through preferred provider contracting arrangements are not precluded from requiring insureds who reside or work in geographic areas served by specialized health insurance policies or mental health insurance policies to secure all or part of their mental health services within those geographic areas served by specialized health insurance policies or mental health insurance policies, provided that all appropriate mental health or substance use disorder services are actually available within those geographic service areas within timeliness standards.(3) Notwithstanding any other law, in the provision of benefits required by this section, a disability insurer may utilize case management, network providers, utilization review techniques, prior authorization, copayments, or other cost sharing, provided that these practices are consistent with Section 10144.4 of this code, and Section 2052 of the Business and Professions Code.(g) This section shall not be construed to deny or restrict in any way the departments authority to ensure a disability insurers compliance with this code.(h) A disability insurer shall not limit benefits or coverage for medically necessary services on the basis that those services should be or could be covered by a public entitlement program, including, but not limited to, special education or an individualized education program, Medicaid, Medicare, Supplemental Security Income, or Social Security Disability Insurance, and shall not include or enforce a contract term that excludes otherwise covered benefits on the basis that those services should be or could be covered by a public entitlement program.(i) A disability insurer shall not adopt, impose, or enforce terms in its policies or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.(j) If the commissioner determines that a disability insurer has violated this section, the commissioner may, after appropriate notice and opportunity for hearing in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), by order, assess a civil penalty not to exceed five thousand dollars ($5,000) for each violation, or, if a violation was willful, a civil penalty not to exceed ten thousand dollars ($10,000) for each violation.
10144.5. (a) (1) Every disability insurance policy issued, amended, or renewed on or after January 1, 2021, that provides hospital, medical, or surgical coverage shall provide coverage for medically necessary treatment of mental health and substance use disorders, under the same terms and conditions applied to other medical conditions as specified in subdivision (c).(2) For purposes of this section, mental health and substance use disorders means a mental health condition or substance use disorder that falls under any of the diagnostic categories listed in the mental and behavioral disorders chapter of the most recent edition of the World Health Organizations International Statistical Classification of Diseases and Related Health Problems, or that is listed in the most recent version of the American Psychiatric Associations Diagnostic and Statistical Manual of Mental Disorders. Changes in terminology, organization, or classification of mental health and substance use disorders in future versions of the American Psychiatric Associations Diagnostic and Statistical Manual of Mental Disorders or the World Health Organizations International Statistical Classification of Diseases and Related Health Problems shall not affect the conditions covered by this section as long as a condition is commonly understood to be a mental health or substance use disorder by health care providers practicing in relevant clinical specialties.(3) (A) For purposes of this section, medically necessary treatment of a mental health or substance use disorder means a service or product addressing the specific needs of that patient, for the purpose of preventing, diagnosing, or treating an illness, injury, condition, or its symptoms, including minimizing the progression of an illness, injury, condition, or its symptoms, in a manner that is all of the following:(i) In accordance with the generally accepted standards of mental health and substance use disorder care.(ii) Clinically appropriate in terms of type, frequency, extent, site, and duration.(iii) Not primarily for the economic benefit of the disability insurer and insureds or for the convenience of the patient, treating physician, or other health care provider.(B) This paragraph does not limit in any way the independent medical review rights of an insured or policyholder under this chapter.(4) Health care provider means any of the following:(A) A person who is licensed under Division 2 (commencing with Section 500) of the Business and Professions Code.(B) An associate marriage and family therapist or marriage and family therapist trainee functioning pursuant to Section 4980.43.3 of the Business and Professions Code.(C) A qualified autism service provider or qualified autism service professional certified by a national entity pursuant to Section 1374.73 of the Health and Safety Code and Section 10144.51.(D) An associate clinical social worker functioning pursuant to Section 4996.23.2 of the Business and Professions Code.(E) An associate professional clinical counselor or professional clinical counselor trainee functioning pursuant to Section 4999.46.3 of the Business and Professions Code.(F) A registered psychologist, as described in Section 2909.5 of the Business and Professions Code.(G) A registered psychological assistant, as described in Section 2913 of the Business and Professions Code.(H) A psychology trainee or person supervised as set forth in Section 2910 or 2911 of, or subdivision (d) of Section 2914 of, the Business and Professions Code.(5) For purposes of this section, generally accepted standards of mental health and substance use disorder care has the same meaning means the generally accepted standards of mental health care and the generally accepted standards of substance use disorder care as defined in subparagraphs (A) and (B) of paragraph (1) of subdivision (f) of Section 10144.52.(6) A disability insurer shall not limit benefits or coverage for mental health and substance use disorders to short-term or acute treatment.(7) All medical necessity determinations made by the disability insurer concerning service intensity, level of care placement, continued stay, and transfer or discharge of insureds diagnosed with mental health and substance use disorders shall be conducted in accordance with the requirements of Section 10144.52.(8) A disability insurer that authorizes a specific type of treatment by a provider pursuant to this section shall not rescind or modify the authorization after the provider renders the health care service in good faith and pursuant to this authorization for any reason, including, but not limited to, the insurers subsequent rescission, cancellation, or modification of the insureds or policyholders contract, or the insurers subsequent determination that it did not make an accurate determination of the insureds or policyholders eligibility. This section shall not be construed to expand or alter the benefits available to the insured or policyholder under an insurance policy.(b) The benefits that shall be covered pursuant to this section shall include, but not be limited to, the following:(1) Basic health care services, as defined in subdivision (b) of Section 1345 of the Health and Safety Code.(2) Intermediate services, including the full range of levels of care, including, but not limited to, residential treatment, partial hospitalization, and intensive outpatient treatment.(3) Prescription drugs, if the policy includes coverage for prescription drugs.(c) The terms and conditions applied to the benefits required by this section, that shall be applied equally to all benefits under the disability insurance policy shall include, but not be limited to, all of the following patient financial responsibilities:(1) Maximum and annual lifetime benefits, if not prohibited by applicable law.(2) Copayments and coinsurance.(3) Individual and family deductibles.(4) Out-of-pocket maximums.(d) If services for the medically necessary treatment of a mental health or substance use disorder are not available in network within the geographic and timely access standards set by law or regulation, the disability insurer shall arrange coverage to ensure the delivery of medically necessary out-of-network services and any medically necessary followup services that, to the maximum extent possible, meet those geographic and timely access standards. As used in this subdivision, to arrange coverage to ensure the delivery of medically necessary out-of-network services includes, but is not limited to, providing services to secure medically necessary out-of-network options that are available to the insured within geographic and timely access standards. The insured shall pay no more than the same cost sharing that the insured would pay for the same covered services received from an in-network provider.(e) This section shall not apply to accident-only, specified disease, hospital indemnity, Medicare supplement, dental-only, or vision-only insurance policies.(f) (1) For the purpose of compliance with this section, a disability insurer may provide coverage for all or part of the mental health and substance use disorder services required by this section through a separate specialized health insurance policy or mental health policy. This paragraph shall not apply to policies that are subject to Section 10112.27.(2) A disability insurer shall provide the mental health and substance use disorder coverage required by this section in its entire service area and in emergency situations as may be required by applicable laws and regulations. For purposes of this section, disability insurance policies that provide benefits to insureds through preferred provider contracting arrangements are not precluded from requiring insureds who reside or work in geographic areas served by specialized health insurance policies or mental health insurance policies to secure all or part of their mental health services within those geographic areas served by specialized health insurance policies or mental health insurance policies, provided that all appropriate mental health or substance use disorder services are actually available within those geographic service areas within timeliness standards.(3) Notwithstanding any other law, in the provision of benefits required by this section, a disability insurer may utilize case management, network providers, utilization review techniques, prior authorization, copayments, or other cost sharing, provided that these practices are consistent with Section 10144.4 of this code, and Section 2052 of the Business and Professions Code.(g) This section shall not be construed to deny or restrict in any way the departments authority to ensure a disability insurers compliance with this code.(h) A disability insurer shall not limit benefits or coverage for medically necessary services on the basis that those services should be or could be covered by a public entitlement program, including, but not limited to, special education or an individualized education program, Medicaid, Medicare, Supplemental Security Income, or Social Security Disability Insurance, and shall not include or enforce a contract term that excludes otherwise covered benefits on the basis that those services should be or could be covered by a public entitlement program.(i) A disability insurer shall not adopt, impose, or enforce terms in its policies or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.(j) If the commissioner determines that a disability insurer has violated this section, the commissioner may, after appropriate notice and opportunity for hearing in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), by order, assess a civil penalty not to exceed five thousand dollars ($5,000) for each violation, or, if a violation was willful, a civil penalty not to exceed ten thousand dollars ($10,000) for each violation.
10144.5. (a) (1) Every disability insurance policy issued, amended, or renewed on or after January 1, 2021, that provides hospital, medical, or surgical coverage shall provide coverage for medically necessary treatment of mental health and substance use disorders, under the same terms and conditions applied to other medical conditions as specified in subdivision (c).(2) For purposes of this section, mental health and substance use disorders means a mental health condition or substance use disorder that falls under any of the diagnostic categories listed in the mental and behavioral disorders chapter of the most recent edition of the World Health Organizations International Statistical Classification of Diseases and Related Health Problems, or that is listed in the most recent version of the American Psychiatric Associations Diagnostic and Statistical Manual of Mental Disorders. Changes in terminology, organization, or classification of mental health and substance use disorders in future versions of the American Psychiatric Associations Diagnostic and Statistical Manual of Mental Disorders or the World Health Organizations International Statistical Classification of Diseases and Related Health Problems shall not affect the conditions covered by this section as long as a condition is commonly understood to be a mental health or substance use disorder by health care providers practicing in relevant clinical specialties.(3) (A) For purposes of this section, medically necessary treatment of a mental health or substance use disorder means a service or product addressing the specific needs of that patient, for the purpose of preventing, diagnosing, or treating an illness, injury, condition, or its symptoms, including minimizing the progression of an illness, injury, condition, or its symptoms, in a manner that is all of the following:(i) In accordance with the generally accepted standards of mental health and substance use disorder care.(ii) Clinically appropriate in terms of type, frequency, extent, site, and duration.(iii) Not primarily for the economic benefit of the disability insurer and insureds or for the convenience of the patient, treating physician, or other health care provider.(B) This paragraph does not limit in any way the independent medical review rights of an insured or policyholder under this chapter.(4) Health care provider means any of the following:(A) A person who is licensed under Division 2 (commencing with Section 500) of the Business and Professions Code.(B) An associate marriage and family therapist or marriage and family therapist trainee functioning pursuant to Section 4980.43.3 of the Business and Professions Code.(C) A qualified autism service provider or qualified autism service professional certified by a national entity pursuant to Section 1374.73 of the Health and Safety Code and Section 10144.51.(D) An associate clinical social worker functioning pursuant to Section 4996.23.2 of the Business and Professions Code.(E) An associate professional clinical counselor or professional clinical counselor trainee functioning pursuant to Section 4999.46.3 of the Business and Professions Code.(F) A registered psychologist, as described in Section 2909.5 of the Business and Professions Code.(G) A registered psychological assistant, as described in Section 2913 of the Business and Professions Code.(H) A psychology trainee or person supervised as set forth in Section 2910 or 2911 of, or subdivision (d) of Section 2914 of, the Business and Professions Code.(5) For purposes of this section, generally accepted standards of mental health and substance use disorder care has the same meaning means the generally accepted standards of mental health care and the generally accepted standards of substance use disorder care as defined in subparagraphs (A) and (B) of paragraph (1) of subdivision (f) of Section 10144.52.(6) A disability insurer shall not limit benefits or coverage for mental health and substance use disorders to short-term or acute treatment.(7) All medical necessity determinations made by the disability insurer concerning service intensity, level of care placement, continued stay, and transfer or discharge of insureds diagnosed with mental health and substance use disorders shall be conducted in accordance with the requirements of Section 10144.52.(8) A disability insurer that authorizes a specific type of treatment by a provider pursuant to this section shall not rescind or modify the authorization after the provider renders the health care service in good faith and pursuant to this authorization for any reason, including, but not limited to, the insurers subsequent rescission, cancellation, or modification of the insureds or policyholders contract, or the insurers subsequent determination that it did not make an accurate determination of the insureds or policyholders eligibility. This section shall not be construed to expand or alter the benefits available to the insured or policyholder under an insurance policy.(b) The benefits that shall be covered pursuant to this section shall include, but not be limited to, the following:(1) Basic health care services, as defined in subdivision (b) of Section 1345 of the Health and Safety Code.(2) Intermediate services, including the full range of levels of care, including, but not limited to, residential treatment, partial hospitalization, and intensive outpatient treatment.(3) Prescription drugs, if the policy includes coverage for prescription drugs.(c) The terms and conditions applied to the benefits required by this section, that shall be applied equally to all benefits under the disability insurance policy shall include, but not be limited to, all of the following patient financial responsibilities:(1) Maximum and annual lifetime benefits, if not prohibited by applicable law.(2) Copayments and coinsurance.(3) Individual and family deductibles.(4) Out-of-pocket maximums.(d) If services for the medically necessary treatment of a mental health or substance use disorder are not available in network within the geographic and timely access standards set by law or regulation, the disability insurer shall arrange coverage to ensure the delivery of medically necessary out-of-network services and any medically necessary followup services that, to the maximum extent possible, meet those geographic and timely access standards. As used in this subdivision, to arrange coverage to ensure the delivery of medically necessary out-of-network services includes, but is not limited to, providing services to secure medically necessary out-of-network options that are available to the insured within geographic and timely access standards. The insured shall pay no more than the same cost sharing that the insured would pay for the same covered services received from an in-network provider.(e) This section shall not apply to accident-only, specified disease, hospital indemnity, Medicare supplement, dental-only, or vision-only insurance policies.(f) (1) For the purpose of compliance with this section, a disability insurer may provide coverage for all or part of the mental health and substance use disorder services required by this section through a separate specialized health insurance policy or mental health policy. This paragraph shall not apply to policies that are subject to Section 10112.27.(2) A disability insurer shall provide the mental health and substance use disorder coverage required by this section in its entire service area and in emergency situations as may be required by applicable laws and regulations. For purposes of this section, disability insurance policies that provide benefits to insureds through preferred provider contracting arrangements are not precluded from requiring insureds who reside or work in geographic areas served by specialized health insurance policies or mental health insurance policies to secure all or part of their mental health services within those geographic areas served by specialized health insurance policies or mental health insurance policies, provided that all appropriate mental health or substance use disorder services are actually available within those geographic service areas within timeliness standards.(3) Notwithstanding any other law, in the provision of benefits required by this section, a disability insurer may utilize case management, network providers, utilization review techniques, prior authorization, copayments, or other cost sharing, provided that these practices are consistent with Section 10144.4 of this code, and Section 2052 of the Business and Professions Code.(g) This section shall not be construed to deny or restrict in any way the departments authority to ensure a disability insurers compliance with this code.(h) A disability insurer shall not limit benefits or coverage for medically necessary services on the basis that those services should be or could be covered by a public entitlement program, including, but not limited to, special education or an individualized education program, Medicaid, Medicare, Supplemental Security Income, or Social Security Disability Insurance, and shall not include or enforce a contract term that excludes otherwise covered benefits on the basis that those services should be or could be covered by a public entitlement program.(i) A disability insurer shall not adopt, impose, or enforce terms in its policies or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.(j) If the commissioner determines that a disability insurer has violated this section, the commissioner may, after appropriate notice and opportunity for hearing in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), by order, assess a civil penalty not to exceed five thousand dollars ($5,000) for each violation, or, if a violation was willful, a civil penalty not to exceed ten thousand dollars ($10,000) for each violation.
10144.5. (a) (1) Every disability insurance policy issued, amended, or renewed on or after January 1, 2021, that provides hospital, medical, or surgical coverage shall provide coverage for medically necessary treatment of mental health and substance use disorders, under the same terms and conditions applied to other medical conditions as specified in subdivision (c).
(2) For purposes of this section, mental health and substance use disorders means a mental health condition or substance use disorder that falls under any of the diagnostic categories listed in the mental and behavioral disorders chapter of the most recent edition of the World Health Organizations International Statistical Classification of Diseases and Related Health Problems, or that is listed in the most recent version of the American Psychiatric Associations Diagnostic and Statistical Manual of Mental Disorders. Changes in terminology, organization, or classification of mental health and substance use disorders in future versions of the American Psychiatric Associations Diagnostic and Statistical Manual of Mental Disorders or the World Health Organizations International Statistical Classification of Diseases and Related Health Problems shall not affect the conditions covered by this section as long as a condition is commonly understood to be a mental health or substance use disorder by health care providers practicing in relevant clinical specialties.
(3) (A) For purposes of this section, medically necessary treatment of a mental health or substance use disorder means a service or product addressing the specific needs of that patient, for the purpose of preventing, diagnosing, or treating an illness, injury, condition, or its symptoms, including minimizing the progression of an illness, injury, condition, or its symptoms, in a manner that is all of the following:
(i) In accordance with the generally accepted standards of mental health and substance use disorder care.
(ii) Clinically appropriate in terms of type, frequency, extent, site, and duration.
(iii) Not primarily for the economic benefit of the disability insurer and insureds or for the convenience of the patient, treating physician, or other health care provider.
(B) This paragraph does not limit in any way the independent medical review rights of an insured or policyholder under this chapter.
(4) Health care provider means any of the following:
(A) A person who is licensed under Division 2 (commencing with Section 500) of the Business and Professions Code.
(B) An associate marriage and family therapist or marriage and family therapist trainee functioning pursuant to Section 4980.43.3 of the Business and Professions Code.
(C) A qualified autism service provider or qualified autism service professional certified by a national entity pursuant to Section 1374.73 of the Health and Safety Code and Section 10144.51.
(D) An associate clinical social worker functioning pursuant to Section 4996.23.2 of the Business and Professions Code.
(E) An associate professional clinical counselor or professional clinical counselor trainee functioning pursuant to Section 4999.46.3 of the Business and Professions Code.
(F) A registered psychologist, as described in Section 2909.5 of the Business and Professions Code.
(G) A registered psychological assistant, as described in Section 2913 of the Business and Professions Code.
(H) A psychology trainee or person supervised as set forth in Section 2910 or 2911 of, or subdivision (d) of Section 2914 of, the Business and Professions Code.
(5) For purposes of this section, generally accepted standards of mental health and substance use disorder care has the same meaning means the generally accepted standards of mental health care and the generally accepted standards of substance use disorder care as defined in subparagraphs (A) and (B) of paragraph (1) of subdivision (f) of Section 10144.52.
(6) A disability insurer shall not limit benefits or coverage for mental health and substance use disorders to short-term or acute treatment.
(7) All medical necessity determinations made by the disability insurer concerning service intensity, level of care placement, continued stay, and transfer or discharge of insureds diagnosed with mental health and substance use disorders shall be conducted in accordance with the requirements of Section 10144.52.
(8) A disability insurer that authorizes a specific type of treatment by a provider pursuant to this section shall not rescind or modify the authorization after the provider renders the health care service in good faith and pursuant to this authorization for any reason, including, but not limited to, the insurers subsequent rescission, cancellation, or modification of the insureds or policyholders contract, or the insurers subsequent determination that it did not make an accurate determination of the insureds or policyholders eligibility. This section shall not be construed to expand or alter the benefits available to the insured or policyholder under an insurance policy.
(b) The benefits that shall be covered pursuant to this section shall include, but not be limited to, the following:
(1) Basic health care services, as defined in subdivision (b) of Section 1345 of the Health and Safety Code.
(2) Intermediate services, including the full range of levels of care, including, but not limited to, residential treatment, partial hospitalization, and intensive outpatient treatment.
(3) Prescription drugs, if the policy includes coverage for prescription drugs.
(c) The terms and conditions applied to the benefits required by this section, that shall be applied equally to all benefits under the disability insurance policy shall include, but not be limited to, all of the following patient financial responsibilities:
(1) Maximum and annual lifetime benefits, if not prohibited by applicable law.
(2) Copayments and coinsurance.
(3) Individual and family deductibles.
(4) Out-of-pocket maximums.
(d) If services for the medically necessary treatment of a mental health or substance use disorder are not available in network within the geographic and timely access standards set by law or regulation, the disability insurer shall arrange coverage to ensure the delivery of medically necessary out-of-network services and any medically necessary followup services that, to the maximum extent possible, meet those geographic and timely access standards. As used in this subdivision, to arrange coverage to ensure the delivery of medically necessary out-of-network services includes, but is not limited to, providing services to secure medically necessary out-of-network options that are available to the insured within geographic and timely access standards. The insured shall pay no more than the same cost sharing that the insured would pay for the same covered services received from an in-network provider.
(e) This section shall not apply to accident-only, specified disease, hospital indemnity, Medicare supplement, dental-only, or vision-only insurance policies.
(f) (1) For the purpose of compliance with this section, a disability insurer may provide coverage for all or part of the mental health and substance use disorder services required by this section through a separate specialized health insurance policy or mental health policy. This paragraph shall not apply to policies that are subject to Section 10112.27.
(2) A disability insurer shall provide the mental health and substance use disorder coverage required by this section in its entire service area and in emergency situations as may be required by applicable laws and regulations. For purposes of this section, disability insurance policies that provide benefits to insureds through preferred provider contracting arrangements are not precluded from requiring insureds who reside or work in geographic areas served by specialized health insurance policies or mental health insurance policies to secure all or part of their mental health services within those geographic areas served by specialized health insurance policies or mental health insurance policies, provided that all appropriate mental health or substance use disorder services are actually available within those geographic service areas within timeliness standards.
(3) Notwithstanding any other law, in the provision of benefits required by this section, a disability insurer may utilize case management, network providers, utilization review techniques, prior authorization, copayments, or other cost sharing, provided that these practices are consistent with Section 10144.4 of this code, and Section 2052 of the Business and Professions Code.
(g) This section shall not be construed to deny or restrict in any way the departments authority to ensure a disability insurers compliance with this code.
(h) A disability insurer shall not limit benefits or coverage for medically necessary services on the basis that those services should be or could be covered by a public entitlement program, including, but not limited to, special education or an individualized education program, Medicaid, Medicare, Supplemental Security Income, or Social Security Disability Insurance, and shall not include or enforce a contract term that excludes otherwise covered benefits on the basis that those services should be or could be covered by a public entitlement program.
(i) A disability insurer shall not adopt, impose, or enforce terms in its policies or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.
(j) If the commissioner determines that a disability insurer has violated this section, the commissioner may, after appropriate notice and opportunity for hearing in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), by order, assess a civil penalty not to exceed five thousand dollars ($5,000) for each violation, or, if a violation was willful, a civil penalty not to exceed ten thousand dollars ($10,000) for each violation.
SEC. 6. Section 10144.52 of the Insurance Code is amended to read:10144.52. (a) (1) A disability insurer that provides hospital, medical, or surgical coverage shall base any medical necessity determination or the utilization review criteria that the insurer, and any entity acting on the insurers behalf, applies to determine the medical necessity of health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders on current generally accepted standards of mental health and substance use disorder care.(2) A disability insurer, and any entity acting on the insurers behalf, shall not use any criteria in addition to the generally accepted standards of substance use disorder, as defined in subparagraph (B) of paragraph (1) of subdivision (f), to make a medical necessity determination, or for the utilization review criteria, for health care services and benefits for the diagnosis, prevention, and treatment of substance use disorders.(b) In conducting utilization review of all covered health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders conditions in children, adolescents, and adults, a disability insurer shall apply the criteria and guidelines set forth in the most recent versions of the treatment criteria developed by the nonprofit professional association for the relevant clinical specialty.(c) In conducting utilization review involving level of care placement decisions or any other patient care decisions that are within the scope of the sources specified in subdivision (b), a disability insurer shall not apply different, additional, conflicting, or more restrictive utilization review criteria than the criteria and guidelines set forth in those sources. This subdivision does not prohibit a disability insurer from applying utilization review criteria to health care services and benefits for mental health and substance use disorders conditions that meet either of the following criteria:(1) Are outside the scope of the criteria and guidelines set forth in the sources specified in subdivision (b), provided the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).(2) Relate to advancements in technology or types of care that are not covered in the most recent versions of the sources specified in subdivision (b), provided that the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).(d) If a disability insurer purchases or licenses utilization review criteria pursuant to paragraph (1) or (2) of subdivision (c), the insurer shall verify and document before use that the criteria were developed in accordance with paragraph (1) of subdivision (a).(e) To ensure the proper use of the criteria described in subdivision subdivisions (a) and (b), every disability insurer shall do all of the following:(1) Sponsor a formal education program by nonprofit clinical specialty associations associations, including, but not limited to, the American Society of Addiction Medicine, to educate the disability insurers staff, including any third parties contracted with the disability insurer to review claims, conduct utilization reviews, or make medical necessity determinations about the clinical review criteria.(2) Make the education program available to other stakeholders, including the insurers participating providers and covered lives.(3) Provide, at no cost, the clinical review criteria and any training material or resources to providers and insured patients.(4) Track, identify, and analyze how the clinical review criteria are used to certify care, deny care, and support the appeals process.(5) Conduct interrater reliability testing to ensure consistency in utilization review decisionmaking covering how medical necessity decisions are made. This assessment shall cover all aspects of utilization review as defined in paragraph (3) of subdivision (f).(6) Run interrater reliability reports about how the clinical guidelines are used in conjunction with the utilization management process and parity compliance activities.(7) Achieve interrater reliability pass rates of at least 90 percent and, if this threshold is not met, immediately provide for the remediation of poor interrater reliability and interrater reliability testing for all new staff before they can conduct utilization review without supervision.(f) The following definitions apply for purposes of this section:(1) (A) Generally accepted standards of mental health and substance use disorder care means standards of care and clinical practice that are generally recognized by health care providers practicing in relevant clinical specialties such as specialties, including psychiatry, psychology, clinical sociology, addiction medicine and counseling, and behavioral health treatment pursuant to Section 10144.51. Valid, evidence-based sources establishing generally accepted standards of mental health and substance use disorder care include peer-reviewed scientific studies and medical literature, clinical practice guidelines and recommendations of nonprofit health care provider professional associations, specialty societies and federal government agencies, and drug labeling approved by the United States Food and Drug Administration.(B) Generally accepted standards of substance use disorder care means the patient placement criteria established by the American Society of Addiction Medicine.(2) Mental health and substance use disorders has the same meaning as defined in paragraph (2) of subdivision (a) of Section 10144.5.(3) Utilization review means either of the following:(A) Prospectively, retrospectively, or concurrently reviewing and approving, modifying, delaying, or denying, based in whole or in part on medical necessity, requests by health care providers, insureds, or their authorized representatives for coverage of health care services prior to, retrospectively or concurrent with the provision of health care services to insureds.(B) Evaluating the medical necessity, appropriateness, level of care, service intensity, efficacy, or efficiency of health care services, benefits, procedures, or settings, under any circumstances, to determine whether a health care service or benefit subject to a medical necessity coverage requirement in a disability insurance policy is covered as medically necessary for an insured.(4) Utilization review criteria means any criteria, standards, protocols, or guidelines used by a disability insurer to conduct utilization review.(g) This section applies to all health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders covered by a disability insurance policy, including prescription drugs.(h) This section applies to a disability insurer that covers hospital, medical, or surgical expenses and conducts utilization review as defined in this section, and any entity or contracting provider that performs utilization review or utilization management functions on an insurers behalf.(i) If the commissioner determines that a disability insurer has violated this section, the commissioner may, after appropriate notice and opportunity for hearing in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), by order, assess a civil penalty not to exceed five thousand dollars ($5,000) for each violation, or, if a violation was willful, a civil penalty not to exceed ten thousand dollars ($10,000) for each violation.(j) A disability insurer shall not adopt, impose, or enforce terms in its policies or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.(k) (1) The utilization review process and utilization review criteria for mental health and substance use disorder care used by a disability insurer, or an entity acting on its behalf, shall be accredited by an independent, nonprofit organization on or before July 1, 2023, and the disability insurer, or the entity acting on its behalf, shall maintain an active accreditation while providing utilization review services.(2) The commissioner shall adopt rules to govern the selection of an independent, nonprofit organization to provide the accreditation services. Until those rules are adopted, the commissioner shall designate the Utilization Review Accreditation Commission as the accrediting organization.(3) The accreditation shall certify that the utilization review process includes specific criteria, including, but not limited to, all of the following:(A) Issuing utilization review decisions in a timely manner.(B) The appropriate scope of medical material used in issuing a utilization review decision.(C) Conducting peer-to-peer consultation.(D) Providing for an internal appeals procedure.(E) Implementing a policy that prohibits physicians, surgeons, and other providers from receiving an incentive based on the utilization review decision.(4) The commissioner shall adopt rules that require additional specific criteria for accrediting a utilization review process, including, but not limited to, all of the following:(A) A physician and surgeon providing utilization review services shall hold an unrestricted license to practice medicine in this state issued pursuant to Section 2050 of the Business and Professions Code or issued by the Osteopathic Medical Board of California under the Osteopathic Act.(B) The disability insurer, or an entity acting on the insurers behalf, shall maintain telephone access during California business hours for physicians and surgeons to request authorization for mental health and substance use disorder care and conduct peer-to-peer discussions regarding issues, including the appropriateness of a requested treatment, modification of a treatment request, or obtaining additional information needed to make a medical necessity determination.(C) The disability insurer, or an entity acting on the insurers behalf, shall disclose any financial conflict of interest between the disability insurer, or the entity acting on the insurers behalf, and any other contracting entity that may impact the medical necessity determination.(D) A physician and surgeon providing utilization review services shall disclose to the treating provider the total number of reviews conducted and the percentage of services approved and denied.(l) If a utilization review request or appeal is filed regarding the medical necessity of a substance use disorder treatment or service, there is a rebuttable presumption that the treatment or service recommended by a physician and surgeon credentialed by the American Society of Addiction Medicine or the California Society of Addiction Medicine is medically necessary.(k)(m) This section does not apply to accident-only, specified disease, hospital indemnity, Medicare supplement, dental-only, or vision-only insurance policies.
SEC. 6. Section 10144.52 of the Insurance Code is amended to read:
### SEC. 6.
10144.52. (a) (1) A disability insurer that provides hospital, medical, or surgical coverage shall base any medical necessity determination or the utilization review criteria that the insurer, and any entity acting on the insurers behalf, applies to determine the medical necessity of health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders on current generally accepted standards of mental health and substance use disorder care.(2) A disability insurer, and any entity acting on the insurers behalf, shall not use any criteria in addition to the generally accepted standards of substance use disorder, as defined in subparagraph (B) of paragraph (1) of subdivision (f), to make a medical necessity determination, or for the utilization review criteria, for health care services and benefits for the diagnosis, prevention, and treatment of substance use disorders.(b) In conducting utilization review of all covered health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders conditions in children, adolescents, and adults, a disability insurer shall apply the criteria and guidelines set forth in the most recent versions of the treatment criteria developed by the nonprofit professional association for the relevant clinical specialty.(c) In conducting utilization review involving level of care placement decisions or any other patient care decisions that are within the scope of the sources specified in subdivision (b), a disability insurer shall not apply different, additional, conflicting, or more restrictive utilization review criteria than the criteria and guidelines set forth in those sources. This subdivision does not prohibit a disability insurer from applying utilization review criteria to health care services and benefits for mental health and substance use disorders conditions that meet either of the following criteria:(1) Are outside the scope of the criteria and guidelines set forth in the sources specified in subdivision (b), provided the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).(2) Relate to advancements in technology or types of care that are not covered in the most recent versions of the sources specified in subdivision (b), provided that the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).(d) If a disability insurer purchases or licenses utilization review criteria pursuant to paragraph (1) or (2) of subdivision (c), the insurer shall verify and document before use that the criteria were developed in accordance with paragraph (1) of subdivision (a).(e) To ensure the proper use of the criteria described in subdivision subdivisions (a) and (b), every disability insurer shall do all of the following:(1) Sponsor a formal education program by nonprofit clinical specialty associations associations, including, but not limited to, the American Society of Addiction Medicine, to educate the disability insurers staff, including any third parties contracted with the disability insurer to review claims, conduct utilization reviews, or make medical necessity determinations about the clinical review criteria.(2) Make the education program available to other stakeholders, including the insurers participating providers and covered lives.(3) Provide, at no cost, the clinical review criteria and any training material or resources to providers and insured patients.(4) Track, identify, and analyze how the clinical review criteria are used to certify care, deny care, and support the appeals process.(5) Conduct interrater reliability testing to ensure consistency in utilization review decisionmaking covering how medical necessity decisions are made. This assessment shall cover all aspects of utilization review as defined in paragraph (3) of subdivision (f).(6) Run interrater reliability reports about how the clinical guidelines are used in conjunction with the utilization management process and parity compliance activities.(7) Achieve interrater reliability pass rates of at least 90 percent and, if this threshold is not met, immediately provide for the remediation of poor interrater reliability and interrater reliability testing for all new staff before they can conduct utilization review without supervision.(f) The following definitions apply for purposes of this section:(1) (A) Generally accepted standards of mental health and substance use disorder care means standards of care and clinical practice that are generally recognized by health care providers practicing in relevant clinical specialties such as specialties, including psychiatry, psychology, clinical sociology, addiction medicine and counseling, and behavioral health treatment pursuant to Section 10144.51. Valid, evidence-based sources establishing generally accepted standards of mental health and substance use disorder care include peer-reviewed scientific studies and medical literature, clinical practice guidelines and recommendations of nonprofit health care provider professional associations, specialty societies and federal government agencies, and drug labeling approved by the United States Food and Drug Administration.(B) Generally accepted standards of substance use disorder care means the patient placement criteria established by the American Society of Addiction Medicine.(2) Mental health and substance use disorders has the same meaning as defined in paragraph (2) of subdivision (a) of Section 10144.5.(3) Utilization review means either of the following:(A) Prospectively, retrospectively, or concurrently reviewing and approving, modifying, delaying, or denying, based in whole or in part on medical necessity, requests by health care providers, insureds, or their authorized representatives for coverage of health care services prior to, retrospectively or concurrent with the provision of health care services to insureds.(B) Evaluating the medical necessity, appropriateness, level of care, service intensity, efficacy, or efficiency of health care services, benefits, procedures, or settings, under any circumstances, to determine whether a health care service or benefit subject to a medical necessity coverage requirement in a disability insurance policy is covered as medically necessary for an insured.(4) Utilization review criteria means any criteria, standards, protocols, or guidelines used by a disability insurer to conduct utilization review.(g) This section applies to all health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders covered by a disability insurance policy, including prescription drugs.(h) This section applies to a disability insurer that covers hospital, medical, or surgical expenses and conducts utilization review as defined in this section, and any entity or contracting provider that performs utilization review or utilization management functions on an insurers behalf.(i) If the commissioner determines that a disability insurer has violated this section, the commissioner may, after appropriate notice and opportunity for hearing in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), by order, assess a civil penalty not to exceed five thousand dollars ($5,000) for each violation, or, if a violation was willful, a civil penalty not to exceed ten thousand dollars ($10,000) for each violation.(j) A disability insurer shall not adopt, impose, or enforce terms in its policies or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.(k) (1) The utilization review process and utilization review criteria for mental health and substance use disorder care used by a disability insurer, or an entity acting on its behalf, shall be accredited by an independent, nonprofit organization on or before July 1, 2023, and the disability insurer, or the entity acting on its behalf, shall maintain an active accreditation while providing utilization review services.(2) The commissioner shall adopt rules to govern the selection of an independent, nonprofit organization to provide the accreditation services. Until those rules are adopted, the commissioner shall designate the Utilization Review Accreditation Commission as the accrediting organization.(3) The accreditation shall certify that the utilization review process includes specific criteria, including, but not limited to, all of the following:(A) Issuing utilization review decisions in a timely manner.(B) The appropriate scope of medical material used in issuing a utilization review decision.(C) Conducting peer-to-peer consultation.(D) Providing for an internal appeals procedure.(E) Implementing a policy that prohibits physicians, surgeons, and other providers from receiving an incentive based on the utilization review decision.(4) The commissioner shall adopt rules that require additional specific criteria for accrediting a utilization review process, including, but not limited to, all of the following:(A) A physician and surgeon providing utilization review services shall hold an unrestricted license to practice medicine in this state issued pursuant to Section 2050 of the Business and Professions Code or issued by the Osteopathic Medical Board of California under the Osteopathic Act.(B) The disability insurer, or an entity acting on the insurers behalf, shall maintain telephone access during California business hours for physicians and surgeons to request authorization for mental health and substance use disorder care and conduct peer-to-peer discussions regarding issues, including the appropriateness of a requested treatment, modification of a treatment request, or obtaining additional information needed to make a medical necessity determination.(C) The disability insurer, or an entity acting on the insurers behalf, shall disclose any financial conflict of interest between the disability insurer, or the entity acting on the insurers behalf, and any other contracting entity that may impact the medical necessity determination.(D) A physician and surgeon providing utilization review services shall disclose to the treating provider the total number of reviews conducted and the percentage of services approved and denied.(l) If a utilization review request or appeal is filed regarding the medical necessity of a substance use disorder treatment or service, there is a rebuttable presumption that the treatment or service recommended by a physician and surgeon credentialed by the American Society of Addiction Medicine or the California Society of Addiction Medicine is medically necessary.(k)(m) This section does not apply to accident-only, specified disease, hospital indemnity, Medicare supplement, dental-only, or vision-only insurance policies.
10144.52. (a) (1) A disability insurer that provides hospital, medical, or surgical coverage shall base any medical necessity determination or the utilization review criteria that the insurer, and any entity acting on the insurers behalf, applies to determine the medical necessity of health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders on current generally accepted standards of mental health and substance use disorder care.(2) A disability insurer, and any entity acting on the insurers behalf, shall not use any criteria in addition to the generally accepted standards of substance use disorder, as defined in subparagraph (B) of paragraph (1) of subdivision (f), to make a medical necessity determination, or for the utilization review criteria, for health care services and benefits for the diagnosis, prevention, and treatment of substance use disorders.(b) In conducting utilization review of all covered health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders conditions in children, adolescents, and adults, a disability insurer shall apply the criteria and guidelines set forth in the most recent versions of the treatment criteria developed by the nonprofit professional association for the relevant clinical specialty.(c) In conducting utilization review involving level of care placement decisions or any other patient care decisions that are within the scope of the sources specified in subdivision (b), a disability insurer shall not apply different, additional, conflicting, or more restrictive utilization review criteria than the criteria and guidelines set forth in those sources. This subdivision does not prohibit a disability insurer from applying utilization review criteria to health care services and benefits for mental health and substance use disorders conditions that meet either of the following criteria:(1) Are outside the scope of the criteria and guidelines set forth in the sources specified in subdivision (b), provided the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).(2) Relate to advancements in technology or types of care that are not covered in the most recent versions of the sources specified in subdivision (b), provided that the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).(d) If a disability insurer purchases or licenses utilization review criteria pursuant to paragraph (1) or (2) of subdivision (c), the insurer shall verify and document before use that the criteria were developed in accordance with paragraph (1) of subdivision (a).(e) To ensure the proper use of the criteria described in subdivision subdivisions (a) and (b), every disability insurer shall do all of the following:(1) Sponsor a formal education program by nonprofit clinical specialty associations associations, including, but not limited to, the American Society of Addiction Medicine, to educate the disability insurers staff, including any third parties contracted with the disability insurer to review claims, conduct utilization reviews, or make medical necessity determinations about the clinical review criteria.(2) Make the education program available to other stakeholders, including the insurers participating providers and covered lives.(3) Provide, at no cost, the clinical review criteria and any training material or resources to providers and insured patients.(4) Track, identify, and analyze how the clinical review criteria are used to certify care, deny care, and support the appeals process.(5) Conduct interrater reliability testing to ensure consistency in utilization review decisionmaking covering how medical necessity decisions are made. This assessment shall cover all aspects of utilization review as defined in paragraph (3) of subdivision (f).(6) Run interrater reliability reports about how the clinical guidelines are used in conjunction with the utilization management process and parity compliance activities.(7) Achieve interrater reliability pass rates of at least 90 percent and, if this threshold is not met, immediately provide for the remediation of poor interrater reliability and interrater reliability testing for all new staff before they can conduct utilization review without supervision.(f) The following definitions apply for purposes of this section:(1) (A) Generally accepted standards of mental health and substance use disorder care means standards of care and clinical practice that are generally recognized by health care providers practicing in relevant clinical specialties such as specialties, including psychiatry, psychology, clinical sociology, addiction medicine and counseling, and behavioral health treatment pursuant to Section 10144.51. Valid, evidence-based sources establishing generally accepted standards of mental health and substance use disorder care include peer-reviewed scientific studies and medical literature, clinical practice guidelines and recommendations of nonprofit health care provider professional associations, specialty societies and federal government agencies, and drug labeling approved by the United States Food and Drug Administration.(B) Generally accepted standards of substance use disorder care means the patient placement criteria established by the American Society of Addiction Medicine.(2) Mental health and substance use disorders has the same meaning as defined in paragraph (2) of subdivision (a) of Section 10144.5.(3) Utilization review means either of the following:(A) Prospectively, retrospectively, or concurrently reviewing and approving, modifying, delaying, or denying, based in whole or in part on medical necessity, requests by health care providers, insureds, or their authorized representatives for coverage of health care services prior to, retrospectively or concurrent with the provision of health care services to insureds.(B) Evaluating the medical necessity, appropriateness, level of care, service intensity, efficacy, or efficiency of health care services, benefits, procedures, or settings, under any circumstances, to determine whether a health care service or benefit subject to a medical necessity coverage requirement in a disability insurance policy is covered as medically necessary for an insured.(4) Utilization review criteria means any criteria, standards, protocols, or guidelines used by a disability insurer to conduct utilization review.(g) This section applies to all health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders covered by a disability insurance policy, including prescription drugs.(h) This section applies to a disability insurer that covers hospital, medical, or surgical expenses and conducts utilization review as defined in this section, and any entity or contracting provider that performs utilization review or utilization management functions on an insurers behalf.(i) If the commissioner determines that a disability insurer has violated this section, the commissioner may, after appropriate notice and opportunity for hearing in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), by order, assess a civil penalty not to exceed five thousand dollars ($5,000) for each violation, or, if a violation was willful, a civil penalty not to exceed ten thousand dollars ($10,000) for each violation.(j) A disability insurer shall not adopt, impose, or enforce terms in its policies or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.(k) (1) The utilization review process and utilization review criteria for mental health and substance use disorder care used by a disability insurer, or an entity acting on its behalf, shall be accredited by an independent, nonprofit organization on or before July 1, 2023, and the disability insurer, or the entity acting on its behalf, shall maintain an active accreditation while providing utilization review services.(2) The commissioner shall adopt rules to govern the selection of an independent, nonprofit organization to provide the accreditation services. Until those rules are adopted, the commissioner shall designate the Utilization Review Accreditation Commission as the accrediting organization.(3) The accreditation shall certify that the utilization review process includes specific criteria, including, but not limited to, all of the following:(A) Issuing utilization review decisions in a timely manner.(B) The appropriate scope of medical material used in issuing a utilization review decision.(C) Conducting peer-to-peer consultation.(D) Providing for an internal appeals procedure.(E) Implementing a policy that prohibits physicians, surgeons, and other providers from receiving an incentive based on the utilization review decision.(4) The commissioner shall adopt rules that require additional specific criteria for accrediting a utilization review process, including, but not limited to, all of the following:(A) A physician and surgeon providing utilization review services shall hold an unrestricted license to practice medicine in this state issued pursuant to Section 2050 of the Business and Professions Code or issued by the Osteopathic Medical Board of California under the Osteopathic Act.(B) The disability insurer, or an entity acting on the insurers behalf, shall maintain telephone access during California business hours for physicians and surgeons to request authorization for mental health and substance use disorder care and conduct peer-to-peer discussions regarding issues, including the appropriateness of a requested treatment, modification of a treatment request, or obtaining additional information needed to make a medical necessity determination.(C) The disability insurer, or an entity acting on the insurers behalf, shall disclose any financial conflict of interest between the disability insurer, or the entity acting on the insurers behalf, and any other contracting entity that may impact the medical necessity determination.(D) A physician and surgeon providing utilization review services shall disclose to the treating provider the total number of reviews conducted and the percentage of services approved and denied.(l) If a utilization review request or appeal is filed regarding the medical necessity of a substance use disorder treatment or service, there is a rebuttable presumption that the treatment or service recommended by a physician and surgeon credentialed by the American Society of Addiction Medicine or the California Society of Addiction Medicine is medically necessary.(k)(m) This section does not apply to accident-only, specified disease, hospital indemnity, Medicare supplement, dental-only, or vision-only insurance policies.
10144.52. (a) (1) A disability insurer that provides hospital, medical, or surgical coverage shall base any medical necessity determination or the utilization review criteria that the insurer, and any entity acting on the insurers behalf, applies to determine the medical necessity of health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders on current generally accepted standards of mental health and substance use disorder care.(2) A disability insurer, and any entity acting on the insurers behalf, shall not use any criteria in addition to the generally accepted standards of substance use disorder, as defined in subparagraph (B) of paragraph (1) of subdivision (f), to make a medical necessity determination, or for the utilization review criteria, for health care services and benefits for the diagnosis, prevention, and treatment of substance use disorders.(b) In conducting utilization review of all covered health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders conditions in children, adolescents, and adults, a disability insurer shall apply the criteria and guidelines set forth in the most recent versions of the treatment criteria developed by the nonprofit professional association for the relevant clinical specialty.(c) In conducting utilization review involving level of care placement decisions or any other patient care decisions that are within the scope of the sources specified in subdivision (b), a disability insurer shall not apply different, additional, conflicting, or more restrictive utilization review criteria than the criteria and guidelines set forth in those sources. This subdivision does not prohibit a disability insurer from applying utilization review criteria to health care services and benefits for mental health and substance use disorders conditions that meet either of the following criteria:(1) Are outside the scope of the criteria and guidelines set forth in the sources specified in subdivision (b), provided the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).(2) Relate to advancements in technology or types of care that are not covered in the most recent versions of the sources specified in subdivision (b), provided that the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).(d) If a disability insurer purchases or licenses utilization review criteria pursuant to paragraph (1) or (2) of subdivision (c), the insurer shall verify and document before use that the criteria were developed in accordance with paragraph (1) of subdivision (a).(e) To ensure the proper use of the criteria described in subdivision subdivisions (a) and (b), every disability insurer shall do all of the following:(1) Sponsor a formal education program by nonprofit clinical specialty associations associations, including, but not limited to, the American Society of Addiction Medicine, to educate the disability insurers staff, including any third parties contracted with the disability insurer to review claims, conduct utilization reviews, or make medical necessity determinations about the clinical review criteria.(2) Make the education program available to other stakeholders, including the insurers participating providers and covered lives.(3) Provide, at no cost, the clinical review criteria and any training material or resources to providers and insured patients.(4) Track, identify, and analyze how the clinical review criteria are used to certify care, deny care, and support the appeals process.(5) Conduct interrater reliability testing to ensure consistency in utilization review decisionmaking covering how medical necessity decisions are made. This assessment shall cover all aspects of utilization review as defined in paragraph (3) of subdivision (f).(6) Run interrater reliability reports about how the clinical guidelines are used in conjunction with the utilization management process and parity compliance activities.(7) Achieve interrater reliability pass rates of at least 90 percent and, if this threshold is not met, immediately provide for the remediation of poor interrater reliability and interrater reliability testing for all new staff before they can conduct utilization review without supervision.(f) The following definitions apply for purposes of this section:(1) (A) Generally accepted standards of mental health and substance use disorder care means standards of care and clinical practice that are generally recognized by health care providers practicing in relevant clinical specialties such as specialties, including psychiatry, psychology, clinical sociology, addiction medicine and counseling, and behavioral health treatment pursuant to Section 10144.51. Valid, evidence-based sources establishing generally accepted standards of mental health and substance use disorder care include peer-reviewed scientific studies and medical literature, clinical practice guidelines and recommendations of nonprofit health care provider professional associations, specialty societies and federal government agencies, and drug labeling approved by the United States Food and Drug Administration.(B) Generally accepted standards of substance use disorder care means the patient placement criteria established by the American Society of Addiction Medicine.(2) Mental health and substance use disorders has the same meaning as defined in paragraph (2) of subdivision (a) of Section 10144.5.(3) Utilization review means either of the following:(A) Prospectively, retrospectively, or concurrently reviewing and approving, modifying, delaying, or denying, based in whole or in part on medical necessity, requests by health care providers, insureds, or their authorized representatives for coverage of health care services prior to, retrospectively or concurrent with the provision of health care services to insureds.(B) Evaluating the medical necessity, appropriateness, level of care, service intensity, efficacy, or efficiency of health care services, benefits, procedures, or settings, under any circumstances, to determine whether a health care service or benefit subject to a medical necessity coverage requirement in a disability insurance policy is covered as medically necessary for an insured.(4) Utilization review criteria means any criteria, standards, protocols, or guidelines used by a disability insurer to conduct utilization review.(g) This section applies to all health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders covered by a disability insurance policy, including prescription drugs.(h) This section applies to a disability insurer that covers hospital, medical, or surgical expenses and conducts utilization review as defined in this section, and any entity or contracting provider that performs utilization review or utilization management functions on an insurers behalf.(i) If the commissioner determines that a disability insurer has violated this section, the commissioner may, after appropriate notice and opportunity for hearing in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), by order, assess a civil penalty not to exceed five thousand dollars ($5,000) for each violation, or, if a violation was willful, a civil penalty not to exceed ten thousand dollars ($10,000) for each violation.(j) A disability insurer shall not adopt, impose, or enforce terms in its policies or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.(k) (1) The utilization review process and utilization review criteria for mental health and substance use disorder care used by a disability insurer, or an entity acting on its behalf, shall be accredited by an independent, nonprofit organization on or before July 1, 2023, and the disability insurer, or the entity acting on its behalf, shall maintain an active accreditation while providing utilization review services.(2) The commissioner shall adopt rules to govern the selection of an independent, nonprofit organization to provide the accreditation services. Until those rules are adopted, the commissioner shall designate the Utilization Review Accreditation Commission as the accrediting organization.(3) The accreditation shall certify that the utilization review process includes specific criteria, including, but not limited to, all of the following:(A) Issuing utilization review decisions in a timely manner.(B) The appropriate scope of medical material used in issuing a utilization review decision.(C) Conducting peer-to-peer consultation.(D) Providing for an internal appeals procedure.(E) Implementing a policy that prohibits physicians, surgeons, and other providers from receiving an incentive based on the utilization review decision.(4) The commissioner shall adopt rules that require additional specific criteria for accrediting a utilization review process, including, but not limited to, all of the following:(A) A physician and surgeon providing utilization review services shall hold an unrestricted license to practice medicine in this state issued pursuant to Section 2050 of the Business and Professions Code or issued by the Osteopathic Medical Board of California under the Osteopathic Act.(B) The disability insurer, or an entity acting on the insurers behalf, shall maintain telephone access during California business hours for physicians and surgeons to request authorization for mental health and substance use disorder care and conduct peer-to-peer discussions regarding issues, including the appropriateness of a requested treatment, modification of a treatment request, or obtaining additional information needed to make a medical necessity determination.(C) The disability insurer, or an entity acting on the insurers behalf, shall disclose any financial conflict of interest between the disability insurer, or the entity acting on the insurers behalf, and any other contracting entity that may impact the medical necessity determination.(D) A physician and surgeon providing utilization review services shall disclose to the treating provider the total number of reviews conducted and the percentage of services approved and denied.(l) If a utilization review request or appeal is filed regarding the medical necessity of a substance use disorder treatment or service, there is a rebuttable presumption that the treatment or service recommended by a physician and surgeon credentialed by the American Society of Addiction Medicine or the California Society of Addiction Medicine is medically necessary.(k)(m) This section does not apply to accident-only, specified disease, hospital indemnity, Medicare supplement, dental-only, or vision-only insurance policies.
10144.52. (a) (1) A disability insurer that provides hospital, medical, or surgical coverage shall base any medical necessity determination or the utilization review criteria that the insurer, and any entity acting on the insurers behalf, applies to determine the medical necessity of health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders on current generally accepted standards of mental health and substance use disorder care.
(2) A disability insurer, and any entity acting on the insurers behalf, shall not use any criteria in addition to the generally accepted standards of substance use disorder, as defined in subparagraph (B) of paragraph (1) of subdivision (f), to make a medical necessity determination, or for the utilization review criteria, for health care services and benefits for the diagnosis, prevention, and treatment of substance use disorders.
(b) In conducting utilization review of all covered health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders conditions in children, adolescents, and adults, a disability insurer shall apply the criteria and guidelines set forth in the most recent versions of the treatment criteria developed by the nonprofit professional association for the relevant clinical specialty.
(c) In conducting utilization review involving level of care placement decisions or any other patient care decisions that are within the scope of the sources specified in subdivision (b), a disability insurer shall not apply different, additional, conflicting, or more restrictive utilization review criteria than the criteria and guidelines set forth in those sources. This subdivision does not prohibit a disability insurer from applying utilization review criteria to health care services and benefits for mental health and substance use disorders conditions that meet either of the following criteria:
(1) Are outside the scope of the criteria and guidelines set forth in the sources specified in subdivision (b), provided the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).
(2) Relate to advancements in technology or types of care that are not covered in the most recent versions of the sources specified in subdivision (b), provided that the utilization review criteria were developed in accordance with paragraph (1) of subdivision (a).
(d) If a disability insurer purchases or licenses utilization review criteria pursuant to paragraph (1) or (2) of subdivision (c), the insurer shall verify and document before use that the criteria were developed in accordance with paragraph (1) of subdivision (a).
(e) To ensure the proper use of the criteria described in subdivision subdivisions (a) and (b), every disability insurer shall do all of the following:
(1) Sponsor a formal education program by nonprofit clinical specialty associations associations, including, but not limited to, the American Society of Addiction Medicine, to educate the disability insurers staff, including any third parties contracted with the disability insurer to review claims, conduct utilization reviews, or make medical necessity determinations about the clinical review criteria.
(2) Make the education program available to other stakeholders, including the insurers participating providers and covered lives.
(3) Provide, at no cost, the clinical review criteria and any training material or resources to providers and insured patients.
(4) Track, identify, and analyze how the clinical review criteria are used to certify care, deny care, and support the appeals process.
(5) Conduct interrater reliability testing to ensure consistency in utilization review decisionmaking covering how medical necessity decisions are made. This assessment shall cover all aspects of utilization review as defined in paragraph (3) of subdivision (f).
(6) Run interrater reliability reports about how the clinical guidelines are used in conjunction with the utilization management process and parity compliance activities.
(7) Achieve interrater reliability pass rates of at least 90 percent and, if this threshold is not met, immediately provide for the remediation of poor interrater reliability and interrater reliability testing for all new staff before they can conduct utilization review without supervision.
(f) The following definitions apply for purposes of this section:
(1) (A) Generally accepted standards of mental health and substance use disorder care means standards of care and clinical practice that are generally recognized by health care providers practicing in relevant clinical specialties such as specialties, including psychiatry, psychology, clinical sociology, addiction medicine and counseling, and behavioral health treatment pursuant to Section 10144.51. Valid, evidence-based sources establishing generally accepted standards of mental health and substance use disorder care include peer-reviewed scientific studies and medical literature, clinical practice guidelines and recommendations of nonprofit health care provider professional associations, specialty societies and federal government agencies, and drug labeling approved by the United States Food and Drug Administration.
(B) Generally accepted standards of substance use disorder care means the patient placement criteria established by the American Society of Addiction Medicine.
(2) Mental health and substance use disorders has the same meaning as defined in paragraph (2) of subdivision (a) of Section 10144.5.
(3) Utilization review means either of the following:
(A) Prospectively, retrospectively, or concurrently reviewing and approving, modifying, delaying, or denying, based in whole or in part on medical necessity, requests by health care providers, insureds, or their authorized representatives for coverage of health care services prior to, retrospectively or concurrent with the provision of health care services to insureds.
(B) Evaluating the medical necessity, appropriateness, level of care, service intensity, efficacy, or efficiency of health care services, benefits, procedures, or settings, under any circumstances, to determine whether a health care service or benefit subject to a medical necessity coverage requirement in a disability insurance policy is covered as medically necessary for an insured.
(4) Utilization review criteria means any criteria, standards, protocols, or guidelines used by a disability insurer to conduct utilization review.
(g) This section applies to all health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders covered by a disability insurance policy, including prescription drugs.
(h) This section applies to a disability insurer that covers hospital, medical, or surgical expenses and conducts utilization review as defined in this section, and any entity or contracting provider that performs utilization review or utilization management functions on an insurers behalf.
(i) If the commissioner determines that a disability insurer has violated this section, the commissioner may, after appropriate notice and opportunity for hearing in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), by order, assess a civil penalty not to exceed five thousand dollars ($5,000) for each violation, or, if a violation was willful, a civil penalty not to exceed ten thousand dollars ($10,000) for each violation.
(j) A disability insurer shall not adopt, impose, or enforce terms in its policies or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section.
(k) (1) The utilization review process and utilization review criteria for mental health and substance use disorder care used by a disability insurer, or an entity acting on its behalf, shall be accredited by an independent, nonprofit organization on or before July 1, 2023, and the disability insurer, or the entity acting on its behalf, shall maintain an active accreditation while providing utilization review services.
(2) The commissioner shall adopt rules to govern the selection of an independent, nonprofit organization to provide the accreditation services. Until those rules are adopted, the commissioner shall designate the Utilization Review Accreditation Commission as the accrediting organization.
(3) The accreditation shall certify that the utilization review process includes specific criteria, including, but not limited to, all of the following:
(A) Issuing utilization review decisions in a timely manner.
(B) The appropriate scope of medical material used in issuing a utilization review decision.
(C) Conducting peer-to-peer consultation.
(D) Providing for an internal appeals procedure.
(E) Implementing a policy that prohibits physicians, surgeons, and other providers from receiving an incentive based on the utilization review decision.
(4) The commissioner shall adopt rules that require additional specific criteria for accrediting a utilization review process, including, but not limited to, all of the following:
(A) A physician and surgeon providing utilization review services shall hold an unrestricted license to practice medicine in this state issued pursuant to Section 2050 of the Business and Professions Code or issued by the Osteopathic Medical Board of California under the Osteopathic Act.
(B) The disability insurer, or an entity acting on the insurers behalf, shall maintain telephone access during California business hours for physicians and surgeons to request authorization for mental health and substance use disorder care and conduct peer-to-peer discussions regarding issues, including the appropriateness of a requested treatment, modification of a treatment request, or obtaining additional information needed to make a medical necessity determination.
(C) The disability insurer, or an entity acting on the insurers behalf, shall disclose any financial conflict of interest between the disability insurer, or the entity acting on the insurers behalf, and any other contracting entity that may impact the medical necessity determination.
(D) A physician and surgeon providing utilization review services shall disclose to the treating provider the total number of reviews conducted and the percentage of services approved and denied.
(l) If a utilization review request or appeal is filed regarding the medical necessity of a substance use disorder treatment or service, there is a rebuttable presumption that the treatment or service recommended by a physician and surgeon credentialed by the American Society of Addiction Medicine or the California Society of Addiction Medicine is medically necessary.
(k)
(m) This section does not apply to accident-only, specified disease, hospital indemnity, Medicare supplement, dental-only, or vision-only insurance policies.
SEC. 7. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
SEC. 7. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
SEC. 7. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
### SEC. 7.