Evaluating State Mental Health and Addiction Parity Statutes: A Technical Report
14
California: In-Depth Prospective Compliance Review
California's Department of Managed Health Care (DMHC) requires insurers to submit
information to determine if they complied with the Federal Parity Law. The DMHC designed
worksheets for plans to show 1) that they cover all behavioral health benefits required under
state law and 2) that they calculate financial requirements in compliance with the parity final
rules.
15,16,17
Insurers were also required to submit their policies and procedures for utilization
management and other non-quantitative treatment limitations. These requirements allowed
DMHC to compare the policies governing behavioral health services with those governing
medical services to identify potential parity violations. DMHC is working with the plans to revise
their policies so that the plans can come into compliance.
Montana: Additional Guidance Detailing Potential Violations
The Montana Commissioner of Securities and Insurance released a bulletin focusing on non-
quantitative treatment limitations. The memorandum contains examples of "red flags" that
indicate a potential parity violation. All of the red flags are taken from de-identified consumer
complaints to the department. Examples include fail-first protocols, blanket exclusions of
treatment regardless of medical necessity, frequent concurrent reviews for inpatient care, refusal
to reimburse for outpatient care because "progress" has not been achieved, requirement that
treatment plans be submitted every 90 days, and no out-of-state coverage for behavioral health.
New York: Optimizing Regulatory Enforcement through Investigations and Fines
The New York Attorney General's Office has reached settlements with numerous insurers after
conducting investigations into their behavioral health claims practices. These investigations
revealed insurers were using protocols that either were not in place for other medical care or
were applied more stringently to behavioral health benefits than other covered services. These
protocols involved use of fail-first policies, more onerous prior authorization procedures, more
frequent and rigorous utilization review, and categorical exclusions of residential treatment and
neuropsychological testing.
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15
California Department of Managed Health Care. (n.d.). Mental Health Parity and Addiction Equity Act. Retrieved from
https://www.dmhc.ca.gov/aboutthedmhc/lawsregulations/mentalhealthparityandaddictionequityactof2008mhpaea.aspx.
16
California Department of Managed Health Care. (2014, Aug. 21). Instructions for the Federal Mental Health Parity and Addiction
Equity Act Compliance Filing.
Retrieved from https://www.dmhc.ca.gov/Portals/0/LawsAndRegulations/MentalHealth/
Workbook_including_Index_and_Tables_1_through_4.pdf.
17
California Department of Managed Health Care. (2014, Aug. 21). Federal Mental Health Parity and Addiction Equity Filing.
Retrieved from https://www.dmhc.ca.gov/Portals/0/LawsAndRegulations/MentalHealth/Table_5-Non_Quantitative_
Treatment_Limitations.pdf.
