California Enacts Historic Parity Law (SB 855)

The American Counseling Association (ACA) is excited to share that a broad coalition of mental health organizations, including California Counseling Association (CCA) and ACA, have successfully aided in the enactment of SB 855. This enacted legislation, authored by Senator Scott Wiener, expands state mental health parity law for fully-insured health insurance plans. The new law updates California health code in accordance with best practices and nationally recognized standards of care for mental health treatment across the full spectrum of care, including early interventions. 

SB 855 also changes the following for fully-insured health plans issued, amended, or renewed on or after January 1, 2021:

• Requires plans to make coverage determinations using nationally recognized standards of care; to provide coverage for medically necessary treatment of all MH/SUDs included in the most-recent edition of the International Classification of Diseases and Related Health Problems (ICD) and the most-recent version of the Diagnostic and Statistical Manual of Mental Disorders (DSM) under the same terms and conditions applied to other medical conditions. 
• Defines medical necessity and medically necessary treatment for purposes of MH/SUDs by reference to generally accepted standards set by nonprofit professional associations for the relevant clinical specialties. Prior state law did not have a definition of these terms. 
• Prohibits a plan from limiting benefits or coverage for MH/SUD to short-term or acute treatment and defines covered benefits to include basic health care services, intermediate services, and prescription drugs.

For health insurance carriers, the changes in the bill that are more significant are those that define medical necessity, require out-of-network care at in-network cost-sharing, and dictate review criteria. It is not anticipated that changes will impact premiums.

In addition to increasing access to care, SB 855 will reduce costs to Medi-Cal and other public programs associated with untreated mental health and substance use disorders. 

For more on the enactment of SB 855, including bill language, go here.