Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Duhigg
LAST UPDATED
ORIGINAL DATE 3/5/2025
SHORT TITLE Health Services Reimbursement
BILL
NUMBER Senate Bill 390
ANALYST Hernandez
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
NMPSIA
Indeterminate
but substantial
Indeterminate
but substantial
Indeterminate
but substantial
Recurring
Other state
funds
RHCA
Indeterminate
but substantial
Indeterminate
but substantial
Indeterminate
but substantial
Recurring
Other state
funds
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Sources of Information
LFC Files
Agency Analysis Received From
New Mexico Public Schools Insurance Authority (NMPSIA)
Retiree Health Care Authority (RHCA)
Office of the Superintendent of Insurance (OSI)
Health Care Authority (HCA)
SUMMARY
Synopsis of Senate Bill 390
Senate Bill 390 (SB390) amends the Health Care Purchasing Act and the Insurance Code to
require that mental and behavioral health services must be reimbursed by insurance companies at
the same level that they would reimburse other health providers for other health conditions for all
services determined to be medically necessary.
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns if enacted, or June 20, 2025.
FISCAL IMPLICATIONS
The Retiree Health Care Authority (RHCA) states that the agency:
Will be financially impacted because more services would become reimbursable, which
would lead to hire utilization and increased claim costs. Depending on how broad the
interpretation of “Medically Necessary Services” is, it could include services that were
previously denied or paid at lower contracted rates. The premium increases or Senate Bill 390 – Page 2
adjustments to cost-sharing would need to be made if the plan expenses increased, adding
additional financial hardship to retirees who are on fixed incomes.” However, their costs
are indeterminate.
NMPSIA states that the bills “broad and somewhat ambiguous terminology used may
inadvertently broaden the spectrum of services and providers eligible for reimbursement beyond
traditional parameters” and that, subsequently, SB390’s impact to their budget remains
indeterminate but likely substantial.
SIGNIFICANT ISSUES
NMPSIA, RHCA, the Office of the Superintendent of Insurance (OSI), and the Health Care
Authority note that “the phrase ‘regardless of the health care provider's designation as a
behavioral or mental health care provider’ suggests that even if a provider isn’t traditionally
classified as a mental health provider, they could still get reimbursed if the service is within their
license. This could broaden the pool of reimbursable providers, [diminishing] the attractiveness
of providers contracting with insurance companies and being part of the network (discounted
rates).”
TECHNICAL ISSUES
OSI notes that the agency was:
Notified of another issue where insurers have denied care for services such as nutritional
counseling performed by a registered dietician for the treatment of an eating disorder
diagnosis, or speech language therapy for the treatment of autism. Insurers have justified
such denials by stating that although such service are within the scope of practice for the
non-behavioral health providers, they cannot bill for claim with behavioral health
diagnosis. The Federal MHPAEA law specifically states that services such as nutritional
counseling and speech language therapy for the treatment of a mental health or substance
use diagnosis are also subject to mental health parity and must be covered. To clarify that
this practice is prohibited, OSI recommends an additional subsection to include address
these type of situations.
OSI proposes the following amendments:
Pg.2 Line 14, Pg.4 Line 4, Pg.5 Line 9 and Pg.6 Line 14:
D. An insurer shall pay or reimburse a behavioral or mental health care provider for all
medically necessary services prescribed or performed by a behavioral or mental health
provider for the treatment or diagnosis of a mental health or substance use disorder
condition, including medical tests and services that the health care provider performs,
regardless of the health care provider's designation as a behavioral or mental health care
provider; provided that the service is within the scope and limitations of the provider's
license and is a covered benefit under the insured’s health plan.
E. An insurer shall pay or reimburse for all medically necessary services, prescribed or
performed in relation to a mental health or substance use disorder diagnosis when
provided by a non-behavioral or mental health provider, regardless of the health care
provider's designation; provided that the service is within the scope and limitations of the
provider's license and is a covered benefit under the insured’s health plan. Senate Bill 390 – Page 3
Pg.2 Line 22:
A. An insurer shall pay or reimburse a behavioral or mental health care provider for all
medically necessary services prescribed or performed by a behavioral or mental health
provider for the treatment or diagnosis of a mental health or substance use disorder
condition, including medical tests and services that the health care provider performs,
regardless of the health care provider's designation as a behavioral or mental health care
provider; provided that the service is within the scope and limitations of the provider's
license and is a covered benefit under the insured’s health plan.
B. An insurer shall pay or reimburse for all medically necessary services, prescribed or
performed in relation to a mental health or substance use disorder diagnosis when
provided by a non-behavioral or mental health provider, regardless of the health care
provider's designation; provided that the service is within the scope and limitations of the
provider's license and is a covered benefit under the insured’s health plan.
AEH/hj/SL2