California Law Aims to Boost Behavioral Health Pay Parity

California recently passed a law requiring health plans to follow a more expansive definition of behavioral health reimbursement parity starting in 2021. Experts say that plans will have to spend more on behavioral health care than they did before, as payers’ utilization management practices will have to follow a more generous standard for medical necessity.

The new law, which passed the California Assembly as S.B. 855 on Sept. 23, expands the requirements of existing behavioral health parity statutes to require that plans reimburse all “medically necessary” behavioral health treatment, including substance use disorder treatment. The law also includes a provision that requires plans to limit cost sharing to in-network levels for members who are only able to access out-of-network providers.

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