Ensuring access to behavioral health services, including health plan compliance with state and federal laws is a significant priority for the DMHC.
State and federal laws require health plans to provide treatment for mental health and substance use disorder conditions. The DMHC refers to treatment and services provided to treat mental health and substance use conditions as behavioral health care.
Mental Health Parity and Addiction Equity Act
The federal Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) requires commercial health plans that offer mental health and substance use disorder benefits to do so in a manner comparable to medical and surgical benefits.
MHPAEA prevents commercial health plans that provide mental health or substance use disorder benefits from placing limits on those benefits that are less favorable than the limits placed on medical/surgical benefits. More specifically, health plans must ensure that financial requirements, such as copayments, coinsurance, and deductibles, and treatment limitations, such as the number and frequency of visits, which are applied to mental health or substance use disorder benefits are not more restrictive than the predominant requirements applied to most of the medical and surgical benefits.
Following the release of the MHPAEA final federal rules, the DMHC required commercial health plans regulated by the Department to conform to the new requirements. The Department's initial compliance review of 25 health plans included a desk review and a focused survey to ensure the plans put MHPAEA compliant benefit designs into practice.
In the desk review the DMHC reviewed classification of benefits and plan compliance with Quantitative Treatment Limits (QTLs), such as cost-sharing and visit limits, and Non-Quantitative Treatment Limits (NQTLs), including plan definitions of medical necessity and utilization management (UM). The focused surveys included a review of plans' benefit classifications and operational information, policies and procedures, utilization management files, financial requirement calculations and interviews with key staff.
Of the 25 health plans reviewed in the desk review, 24 were found out of compliance for financial requirements, three were out of compliance for MH/SUD day and visit limits (QTLs), and 12 were out of compliance for NQTLs. The focused surveys found that 11 plans were compliant, and 14 plans were non-compliant. Of the 14 plans that were non-compliant, seven plans were non-compliant in NQTLs, two plans in QTLs and five plans in both.
As a result of the DMHC's focused compliance review, many health plans were required to update their policies and procedures and/or revise cost-sharing for services and treatment. Seven health plans were also required to recalculate cost-sharing for enrollees after the DMHC found the plans had applied cost-sharing for mental health and substance use disorder services that differed from cost-sharing for medical services. This resulted in enrollees being reimbursed a total of $517,375.
The DMHC has also taken enforcement actions against plans found to be out of compliance with both federal and state behavioral health care laws. This includes taking actions against plans for the wrongful denial of residential treatment for a severe mental health condition, applying cost-sharing out of compliance with parity and failure to provide coverage for the diagnosis and medically necessary treatment of severe mental illnesses. The enforcement actions included fines and corrective actions by the health plans. Enforcement Actions can be searched on the Department's Enforcement Action Database.
Following this initial compliance review of MHPAEA, the DMHC continues to monitor health plan compliance with both federal and state behavioral health care requirements through the Department's oversight tools. This includes routine medical surveys of health plans, network reviews, consumer complaints to the DMHC Help Center, and enforcement actions. The Department also conducts MHPAEA compliance reviews for newly licensed plans and plans that change previously reviewed benefits.
Additionally, as part of the DMHC's ongoing efforts to ensure appropriate enrollee access to behavioral health care, the DMHC is conducting focused behavioral health investigations of all full service commercial health plans regulated by the Department. More information on these focused investigations can be found under Health Plan Compliance.
NQTL Comparative Analysis Compliance Filing
MHPAEA prohibits health plans from imposing NQTLs on MH/SUD benefits that apply more restrictively than as applied to medical/surgical benefits. The Consolidated Appropriations Act, 2021 (CAA), effective December 2020, requires health plans to use a standardized methodology for documenting and demonstrating NQTL compliance. Under the CAA, health plans that impose NQTLs on MH or SUD benefits, are required to perform and document comparative analyses of the design and application of the NQTLs, providing specified, detailed information to demonstrate compliance. The NQTL rule requires that a health plan’s processes, strategies, evidentiary standards, or other factors used to apply the NQTLs to MH/SUD benefits in the classification, as written and in operation, are comparable to, and applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used to apply the NQTLs to medical or surgical benefits in the classification.
The DMHC is beginning its own compliance project to assess health plan compliance with the CAA. The DMHC will conduct a phased review process, beginning its review for the health plans listed below.
- Blue Cross of California (Anthem Blue Cross)
- California Physicians’ Service (Blue Shield of California)
- Health Net of California, Inc.
- Kaiser Foundation Health Plan, Inc. (Kaiser Permanente)
- UHC of California (UnitedHealthcare of California) and UnitedHealthcare Benefits Plan of California
The DMHC will expand its review to include additional health plans. Health plans are instructed to use the following templates and instructions for their filings.
- Consumer Fact Sheet and Press Release on the amended California Mental Health Parity Act.
- DMHC All Plan Letter directing commercial full-service health plans and specialized health plans offering behavioral health services to demonstrate compliance with the amended California Mental Health Parity Act (SB 855, 2020).
- Review these additional resources for Behavioral Health information and help.
- See Behavioral Health Care for more information.