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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Peter Johnson

Peter Johnson

Peter has worked as a journalist since 2011 and has covered health care since 2020. At AIS Health, Peter covers trends in finance, business and policy that affect the health insurance and pharma sectors. For Health Plan Weekly, he covers all aspects of the U.S. health insurance sector, including employer-sponsored insurance, Medicaid managed care, Medicare Advantage and the Affordable Care Act individual marketplaces. In Radar on Drug Benefits, Peter covers the operations of (and conflicts between) pharmacy benefit managers and pharmaceutical manufacturers, with a particular focus on pricing dynamics and market access. Before joining AIS Health, Peter covered transportation, public safety and local government for various outlets in Seattle, his hometown and current place of residence. He graduated with a B.A. from Colby College.

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