It’s time for California to enforce its landmark parity law
By Meiram Bendat
At last month’s California Senate Select Committee for Mental Health and Addiction hearing on enforcement of SB 855, the state’s landmark mental health parity law that I drafted with staunch support from NUHW, the California Department of Managed Health Care (DMHC) found itself in the “hot seat.” Just days earlier, the state agency announced a sweeping, $200 million settlement with Kaiser Permanente to address the HMO’s systemic failure to provide timely and medically necessary mental health care in violation of parity laws.
SB 855, which went into effect in 2021, was written to stop health plans from wrongly denying mental health care to Californians. The bill requires health plans to:
- Cover medically necessary services for all mental health conditions identified in the Diagnostic and Statistical Manual and International Classification of Diseases.
- Determine “medical necessity” through the exclusive application of non-profit professional association guidelines rather than allowing health plans to set their own criteria for determining “medical necessity.”
- Provide out-of-network care at no additional cost when timely or geographically accessible in-network care is not available for medically necessary treatment.
DMHC’s “findings” of Kaiser’s pervasive non-compliance with timely access and medical necessity standards were hardly surprising and appear to have been timed to avert the perception that the agency is a “do-nothing” regulator before its director testified during the October 18, 2023 oversight hearing. In fact, NUHW members and many Kaiser patients have spoken out for years about Kaiser’s inadequate service offerings and unreasonable treatment delays. Given that previous regulatory audits of Kaiser identified similar deficiencies, the still inadequate (if not worsening) performance of the state’s largest health plan suggests that DMHC has persistently turned a blind eye to known problems.
Both consumer and provider advocates at the oversight hearing testified that DMHC has lost sight of its mandate — to protect the public from health plan abuses. For example, DMHC has yet to finalize regulations implementing SB 855. Unlike the California Department of Insurance, the agency has not even attempted to promulgate any regulations concerning geographic access standards.
Additionally, DMHC takes months to process consumer complaints, including those concerning timely access to mental health care, and thereby runs roughshod over the very laws it is meant to enforce. With respect to medical necessity disputes, for the past seven years, on average, DMHC has permitted its Independent Medical Review (“IMR”) contractor to resolve expedited IMRs in nearly double the time set by law.
Equally concerning is that DMHC routinely deprives consumers of due process — namely, an advance opportunity to review and address inaccurate or misleading information provided by health plans in response to consumer complaints. Instead, consumers receive opening and closing letters from DMHC that do not identify or provide direct contact information for staff members assigned to review their complaints. On the other hand, health plans have direct access to the full lineup of DMHC investigators (including attorneys) and routinely communicate by phone and email with them about consumer complaints. This lopsided access skews any semblance of impartiality on the part of the regulator and can have devastating implications for patients.
In unveiling the Kaiser settlement, Governor Newsom announced that “Accountability of the private sector is foundational to ensuring our entire system of behavioral health care works for all Californians.” But accountability of public agencies charged with regulating the private managed care sector is also foundational. In the coming year, NUHW and I will continue to work hard to facilitate a regulatory culture change so that the access needs of Californians come first.
Meiram Bendat is the founder and president of Psych-Appeal, the nation’s first private mental health insurance law firm. In addition to being a licensed psychotherapist, Dr. Bendat is the author of California’s pioneering mental health parity law, SB 855, which has served as model legislation throughout the country.