Karen Bailey’s 20-year-old daughter has struggled with depression and anxiety for years. Since 2017, she’s been in three intensive group therapy programs and, each time, the family’s insurer cut her coverage short, says Bailey.
“At a certain point, they would send us a form letter saying: We have determined that she is all better, it’s no longer necessary, so we are not covering it anymore,” says Bailey, 59, who lives in Los Angeles. “And believe me, she was not all better. In one case, she was worse.”
In making coverage decisions about mental health and addiction treatment, insurers frequently use “their own kind of black box criteria, not knowable to enrollees and not consistent with standards of care,” says Julie Snyder, director of government affairs at the Steinberg Institute, a Sacramento-based mental health policy and advocacy group.
A California law that took effect Jan. 1, SB-855, should make it much harder for state-regulated commercial health plans to do so. It requires them to use nationally recognized clinical standards established by nonprofit associations of clinical specialists to determine which mental health and addiction treatments they’ll cover — and for how long.
This means, for example, that insurers will find it more difficult to limit a client to only a week of residential addiction treatment when 30 days is the clinical standard, or to treat only the most immediate physical symptoms of anorexia and not the underlying psychological drivers, says Snyder.
“It’s a very strong law, and it has the potential to really be a game changer,” says Karen Fessel, executive director and founder of the Mental Health and Autism Insurance Project, which supported the legislation.
There could hardly be a better time to beef up mental health coverage, as we approach the anniversary of a pandemic that’s been tied to an increase in depression, anxiety, substance use and suicidal thoughts.
Crucially, the new law, which updates and replaces California’s previous mental health parity statute, dramatically expands the number of conditions insurers must cover.
The state law in force until this year required coverage for only nine “severe” mental illnesses, including schizophrenia, bipolar disorder and major depressive disorder, and for “serious emotional disturbances” in children. SB-855 mandates coverage for conditions ranging from mild to severe.
Federal law already required broader coverage, but in vague terms that health plans have frequently circumvented with their restrictive definitions of what’s medically necessary, patient advocates say.
By expanding the range of conditions health plans are obliged to cover and holding them to stiffer standards on the type and amount of care they must pay for, the new law closes “loopholes you could drive a Mack truck through,” says state Sen. Scott Wiener (D-San Francisco), who authored the legislation.
For years, many health plans declined to cover mental health treatment until a patient was in crisis, Wiener says. The new law “makes sure people will be able to get care early while they still have a home, a family, a job.”
Another key aspect of the law is that it requires health plans to cover out-of-network providers at in-network costs if an enrollee is unable to find timely treatment a reasonable distance — generally, 15 miles or 30 minutes — from their home.
“That is something we run into all the time,” Bailey says. The family has spent $100,000 over the years on out-of-network mental health providers for their two kids, she says.
Opponents of the new law, including the California Association of Health Plans and the California Chamber of Commerce, have argued it will significantly increase health care costs, subject insurers to continuous litigation and — through its stringent definition of medical necessity — impede the ability of providers to decide what’s best for their patients.
Proponents say the medical necessity guidelines spelled out by the specialists’ associations allow providers wide discretion to decide the best treatment for each patient. An analysis conducted for state legislators by the California Health Benefits Review Program estimated that in the first year of the law’s implementation, premiums and enrollee cost sharing would rise a mere 0.002%.
The new law won’t help everybody: It applies only to state-regulated commercial health plans covering some 13 million Californians — about one-third of the state’s population. It excludes Medi-Cal, which insures another third of state residents, as well as federally regulated commercial plans, which cover nearly 6 million.
Because only a minuscule share of patients fight their health plans over denials of care, mental health advocates hope that diligent enforcement by the Department of Managed Health Care, which regulates plans covering the vast majority of commercially insured Californians, will discourage insurers from denying necessary care in the first place.
Rachel Arrezola, a spokesperson for the agency, which opposed provisions of the legislation last year, said it fully intends to ensure compliance and has begun to do so.
But if your health plan still denies you the care you believe you need, fight it, patient advocates and health care attorneys say.
“You need to be vigilant, and you need to advocate for yourself and you need to appeal denials, and you need to do it in writing,” says Cari Schwartz, a Los Angeles lawyer who represents patients.
If you appeal a decision over the phone, take detailed notes, write down the time and day of the conversation and get the name of the person you spoke with, Schwartz says. Build a file of all communications and other information related to your case, she says.
And be persistent. “I think insurance companies bank on individuals giving up the fight,” Schwartz says.
If you need help, contact the Health Consumer Alliance (1-888-804-3536 or www.healthconsumer.org), which offers free advice and legal services.
If your mental health provider requested a certain type of treatment in 2020 that was denied by your health plan, ask the provider to resubmit it this year, because the changed legal landscape might work in your favor, says the Steinberg Institute’s Snyder.
With most commercial health plans, you have 180 days from the date you receive a denial to file an appeal. You must first appeal to your insurer. If it fails to respond after 30 days, or upholds its decision, you can take it to the agency that regulates your policy.
In most cases, that will be the Department of Managed Health Care (www.dmhc.ca.gov or 1-888-466-2219), which has a help center and allows you to file a complaint online. If your regulator is the California Department of Insurance, you can call its helpline at 1-800-927-4357 for advice, and file a complaint on its website (www.insurance.ca.gov).
Most Californians enrolled in commercial health plans are entitled to a review by independent medical experts if they are denied care because the insurer deems it unnecessary, or it’s experimental — or the insurer won’t reimburse them for emergency care.
The reviews, which can be requested through state regulators, are well worth the effort: About 60% of Independent Medical Reviews filed through the Department of Managed Health Care result in the patient getting the treatment that was initially denied, Arrezola says.
Be sure to open an archive on the managed care department’s website (https://wpso.dmhc.ca.gov/imr/), in which you can search past decisions for cases similar to yours. They can help you frame your arguments.
Ultimately, the utility of the new law depends on the will of regulators to enforce it and of consumers to avail themselves of it.
“With any luck, it means people won’t have to take out a $50,000 mortgage on their house to pay for their children’s opioid treatment,” says Snyder. “Unfortunately, that is all too common.”