REPORT TITLE:
Mental health parity


DESCRIPTION:
Requires health insurers to make equitable reimbursements for
mental health treatment and mandates full parity in mental health
treatment benefits relative to other insurance benefits. (HB2550
HD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2550
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO MENTAL HEALTH PARITY.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Chapter 431M, Hawaii Revised Statutes, requires
 
 2 insurance plans to provide a minimum set of mental health
 
 3 treatment benefits to subscribers.  Generally, the minimum
 
 4 requirements are thirty days of inpatient treatment and twenty-
 
 5 four outpatient visits per year.  Act 121, Session Laws of Hawaii
 
 6 1999, requires removal of these limits for serious mental
 
 7 illnesses including schizophrenia, schizo-affective disorder, and
 
 8 bipolar mood disorder.  Limits were not removed for other mental
 
 9 health conditions or disorders of adults or children that fall
 
10 under other diagnostic categories of the Mental Disorders Section
 
11 of the International Classification of Diseases or the Diagnostic
 
12 and Statistical Manual of the American Psychiatric Association.
 
13      The national trend in mental health care is moving towards
 
14 expanding mandated mental health treatment benefits through
 
15 "parity" with other physical illnesses.  This trend is based on
 
16 the assumption that it is discriminatory to restrict or offer
 
17 less access in the mental health care area than in other areas of
 
18 health care.  For example, if an insurance policy does not place
 

 
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 1 limits on physical health care treatment, it cannot put limits on
 
 2 mental health treatment benefits.
 
 3      Four evaluation reports, mandated by the legislature, have
 
 4 reviewed the impact of Hawaii's mental health benefit
 
 5 requirement.  These reports found an overall low utilization of
 
 6 mental health services in Hawaii with five per cent or fewer
 
 7 subscribers utilizing mental health services.  When individuals
 
 8 utilize outpatient mental health services, seventy-five per cent
 
 9 utilize five or fewer visits, seventeen per cent utilize six to
 
10 ten visits, six per cent utilize eleven to fifteen visits, one
 
11 and one-half per cent utilize sixteen to twenty visits, and less
 
12 than one per cent utilize twenty or more visits.  Evidence
 
13 suggests that individuals who utilize more than twenty mental
 
14 health visits suffer from substantial impairment and disability.
 
15 Chapter 431M does not ensure that the treatment needs of this
 
16 small group are effectively met.  Because of the overall low
 
17 utilization of mental health treatment services, the cost of
 
18 providing coverage to this small group is minimal because costs
 
19 are spread across the larger risk pool.  National data suggests
 
20 that minimal costs will be associated with providing full parity
 
21 in health insurance coverage for this population.  Because Hawaii
 
22 already has a strong mandated minimum mental health benefit, the
 
23 costs of providing full mental health parity will be less than
 

 
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 1 national estimates.  Nationally, it is estimated that premium
 
 2 increases of approximately one dollar per member per month or
 
 3 less will ensure parity of mental health benefits.
 
 4      Well-defined systems of benefits management, including the
 
 5 practices of prior authorization, reauthorization, concurrent
 
 6 review, the use of standardized clinical protocols and best
 
 7 practices, and other forms of "benefits management" are rapidly
 
 8 changing the landscape of mental health service delivery. The
 
 9 adoption of benefits-management practice has had widespread and
 
10 continuing impact on the cost of providing mental health
 
11 services.  A recent report from the RAND Corporation suggests
 
12 that previous estimates developed two to three years ago in the
 
13 evaluation of mental health parity on a federal level
 
14 overestimate the cost of providing unlimited managed mental
 
15 health care coverage by a factor of four to eight.  Having a
 
16 generous benefit design in a health plan does not imply high
 
17 levels of use and costs for mental health care.  This bill amends
 
18 chapter 431-M, Hawaii Revised Statutes, to require health
 
19 insurers to equitably reimburse for mental health treatment.  It
 
20 also requires full "parity" in mental health treatment benefits
 
21 relative to other health insurance benefits.
 
22      SECTION 2.  Section 431M-1, Hawaii Revised Statutes is
 
23 amended to read as follows:
 

 
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 1      1.  By amending the definition of "mental illness" to read:
 
 2      ""Mental illness" means [a syndrome of clinically
 
 3 significant psychological, biological, or behavioral
 
 4 abnormalities that results in personal distress or suffering,
 
 5 impairment of capacity for functioning, or both.  For the
 
 6 purposes of this chapter, the terms "mental disorder" and "mental
 
 7 illness" shall be used interchangeably and shall include the
 
 8 definitions identified in the most recent publications of the
 
 9 Diagnostic and Statistical Manual of the American Psychiatric
 
10 Association or International Classifications of Disease.
 
11 Epilepsy, senility, mental retardation, or other development
 
12 disabilities and addiction to or abuse of intoxicating substances
 
13 do not in and of themselves constitute a mental disorder.] any
 
14 mental health condition or disorder of adults or children that
 
15 falls under any of the diagnostic categories listed in the
 
16 Diagnostic and Statistical Manual of the American Psychiatric
 
17 Association with the exception of the alcohol or substance use or
 
18 abuse disorders listed as codes 291.00-292.99 and 303.00-305.99,
 
19 as periodically revised, or in the Mental Disorders Section of
 
20 the International Classification of Diseases, used for billing
 
21 purposes, as periodically revised.
 
22      2.  By deleting the definition of "serious mental illness". 
 

 
 
 
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 1      ["Serious mental illness" means schizophrenia, schizo-
 
 2 affective disorder, and bipolar mood disorder, as defined in the
 
 3 most recent version of the Diagnostic and Statistical Manual of
 
 4 the American Psychiatric Association, which is of sufficient
 
 5 severity to result in substantial interference with the
 
 6 activities of daily living."]
 
 7      SECTION 3.  Section 431M-4, Hawaii Revised Statutes, is
 
 8 amended as follows:
 
 9      "(a) The covered benefit for alcohol or drug dependence or
 
10 substance abuse services under this chapter shall not be less
 
11 than thirty days of in-hospital services per year.  Each day of
 
12 in-hospital services may be exchanged for two days of nonhospital
 
13 residential services, two days of partial hospitalization
 
14 services, or two days of day treatment services.  [Visits to a
 
15 physician, psychologist, clinical social worker, or advanced
 
16 practice registered nurse with a psychiatric or mental health
 
17 specialty or subspecialty shall not be less than thirty visits
 
18 per year to hospital or nonhospital facilities or to mental
 
19 health outpatient facilities for day treatment or partial
 
20 hospitalization services.]  Each day of in-hospital services may
 
21 also be exchanged for two outpatient visits under this chapter;
 
22 provided that the patient's condition is such that the outpatient
 
23 services would reasonably preclude hospitalization.  The total
 

 
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 1 covered benefit for outpatient services [in subsections (b) and
 
 2 (c)] for alcohol or drug dependence or substance abuse services
 
 3 shall not be less than [twenty-four visits per year; provided
 
 4 that coverage of twelve of the twenty-four outpatient visits
 
 5 shall apply only to the services under subsection (c).] twelve
 
 6 visits per year.  Deductible and copayment amounts applied to
 
 7 alcohol or drug dependence or substance abuse services shall not
 
 8 be greater than those applied to other illnesses or diseases.  In
 
 9 the case of alcohol and drug dependence benefits, the insurance
 
10 policy may limit the number of treatment episodes but may not
 
11 limit the number to less than two treatment episodes per
 
12 lifetime.  The [other] covered benefits under this chapter shall
 
13 apply to any of the following services: [services in subsection
 
14 (b) or (c).  In the case of alcohol and drug dependence benefits,
 
15 the insurance policy may limit the number of treatment episodes
 
16 but may not limit the number to less that two treatment episodes
 
17 per lifetime.  Nothing in this section shall be construed to
 
18 limit serious mental illness benefits.
 
19      (b)  Alcohol and drug dependence benefits.]
 
20      (1)  Detoxification services as a covered benefit under this
 
21           chapter shall be provided either in a hospital or in a
 
22           nonhospital facility which has a written affiliation
 
23           agreement with a hospital for emergency, medical, and
 

 
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 1           mental health support services.  The following services
 
 2           shall be covered under detoxification services:
 
 3           (A)  Room and board;
 
 4           (B)  Diagnostic x-rays;
 
 5           (C)  Laboratory testing; and
 
 6           (D)  Drugs, equipment use, special therapies, and
 
 7                supplies.
 
 8           Detoxification services shall be included as part of
 
 9           the covered in-hospital services, but shall not be
 
10           included in the treatment episode limitation[, as
 
11           specified in subsection (a)];
 
12      (2)  Alcohol or drug dependence treatment through in-
 
13           hospital, nonhospital residential or day treatment
 
14           substance abuse services as a covered benefit under
 
15           this chapter shall be provided in a hospital or
 
16           nonhospital facility.  Before a person qualifies to
 
17           receive benefits under this subsection, a physician,
 
18           psychologist, clinical social worker, or advanced
 
19           practice registered nurse certified pursuant to chapter
 
20           321 shall determine that the person suffers from
 
21           alcohol or drug dependence, or both.  The substance
 
22           abuse services covered under this paragraph shall
 
23           include those services which are required for licensure
 

 
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 1           and accreditation, and shall be included as part of the
 
 2           covered in-hospital services [as specified in
 
 3           subsection (a)].  Excluded from alcohol or drug
 
 4           dependence treatment under this subsection are
 
 5           detoxification services and educational programs to
 
 6           which drinking or drugged drivers are referred by the
 
 7           judicial system, and services performed by mutual self-
 
 8           help groups; and
 
 9      (3)  Alcohol or drug dependence outpatient services as a
 
10           covered benefit under this chapter shall be provided
 
11           under an individualized treatment plan approved by a
 
12           physician, psychologist, clinical social worker, or
 
13           advanced practice registered nurse certified pursuant
 
14           to chapter 321 and must be reasonably expected to
 
15           produce remission of the patient's condition.  An
 
16           individualized treatment plan approved by a clinical
 
17           social worker or an advanced practice registered nurse
 
18           for a patient already under the care or treatment of a
 
19           physician or psychologist shall be done in consultation
 
20           with the physician or psychologist.  Services covered
 
21           under this paragraph shall be included as part of the
 
22           covered outpatient services as specified [in subsection
 
23           (a).] above.
 

 
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 1      [(c) Mental illness benefits.] (b)  Every health care
 
 2 insurer shall provide coverage for the treatment of mental
 
 3 illness of adults and children.  Such coverage shall be under the
 
 4 same terms and conditions as coverage is provided for other
 
 5 illnesses and diseases.  Insurance coverage offered pursuant to
 
 6 this statute shall not impose day or visit limits, amount limits
 
 7 such as lifetime or annual plan payment limits, deductibles,
 
 8 copayments, out-of-pocket limits, coinsurance, or other cost-
 
 9 sharing requirements for diagnosis or treatment of mental
 
10 illnesses that are not imposed for other illnesses and diseases.
 
11      [(1) Covered benefits for mental health services set forth
 
12           in this subsection shall be limited to coverage for
 
13           diagnosis and treatment of mental disorders.]  All
 
14           mental health services shall be provided under an
 
15           individualized treatment plan approved by a physician,
 
16           psychologist, clinical social worker, or advanced
 
17           practice registered nurse with a psychiatric or mental
 
18           health specialty or subspecialty and must be reasonably
 
19           expected to improve the patient's condition.  An
 
20           individualized treatment plan approved by a clinical
 
21           social worker or an advanced practice registered nurse
 
22           with a psychiatric or mental health specialty or
 
23           subspecialty for a patient already under the care or
 

 
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 1           treatment of a physician or psychologist shall be done
 
 2           in consultation with the physician or psychologist[;
 
 3      (2)  In-hospital and nonhospital residential mental health
 
 4           services as a covered benefit under this chapter shall
 
 5           be provided in a hospital or a nonhospital residential
 
 6           facility.  The services to be covered shall include
 
 7           those services required for licensure and
 
 8           accreditation, and shall be included as part of the
 
 9           covered in-hospital services as specified in subsection
 
10           (a);
 
11      (3)  Mental health partial hospitalization as a covered
 
12           benefit under this chapter shall be provided by a
 
13           hospital or a mental health outpatient facility.  The
 
14           services to be covered under this paragraph shall
 
15           include those services required for licensure and
 
16           accreditation and shall be included as part of the
 
17           covered in-hospital services as specified in subsection
 
18           (a); and
 
19      (4)  Mental health outpatient services shall be a covered
 
20           benefit under this chapter and shall be included as
 
21           part of the covered outpatient services as specified in
 
22           subsection (a)]."
 

 
 
 
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 1      SECTION 4.  Section 431M-5, Hawaii Revised Statutes, is
 
 2 repealed.
 
 3      ["§431M-5 Nondiscrimination in deductibles, copayment
 
 4 plans, and other limitations on payment.(a)  Deductible or
 
 5 copayment plans may be applied to benefits paid to or on behalf
 
 6 of patients during the course of treatment as described in
 
 7 section 431M-4, but in any case the proportion of deductibles or
 
 8 copayments shall be not greater than those applied to comparable
 
 9 physical illnesses generally requiring a comparable level of care
 
10 in each policy.
 
11      (b)  Notwithstanding subsection (a), health maintenance
 
12 organizations may establish reasonable provisions for enrollee
 
13 cost-sharing so long as the amount the enrollee is required to
 
14 pay does not exceed the amount of copayment and deductible
 
15 customarily required by insurance policies which are subject to
 
16 the provisions of this chapter for this type and level of
 
17 service.  Nothing in this chapter prevents health maintenance
 
18 organizations from establishing durational limits which are
 
19 actuarially equivalent to the benefits required by this chapter.
 
20 Health maintenance organizations may limit the receipt of covered
 
21 services by enrollees to services provided by or upon referral by
 
22 providers associated with the health maintenance organization.
 

 
 
 
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 1      (c)  A health insurance plan shall not impose rates, terms,
 
 2 or conditions including service limits and financial
 
 3 requirements, on serious mental illness benefits, if similar
 
 4 rates, terms, or conditions are not applied to services for other
 
 5 medical or surgical conditions.  This subsection shall not apply
 
 6 to individual or group hospital or medical service plan
 
 7 contracts, and nonprofit mutual benefit association and health
 
 8 maintenance organization health plan contracts providing coverage
 
 9 to employers with twenty-five or fewer employees, and government
 
10 employee health benefits plans under chapter 87; and provided
 
11 further that this subsection shall not apply to QUEST medical
 
12 plans under the department of human services until July 1,
 
13 2002."]
 
14      SECTION 5.  Act 121, Session Laws of Hawaii 1999, is amended
 
15 as follows:
 
16      1.  By amending section 6 to read as follows:
 
17      "SECTION 6.  This Act shall take effect on July 1, 1999;
 
18 provided that [insurance,]:
 
19      (1)  Insurance, health, or service plan contracts subject to
 
20           the terms of this Act and issued or renewed after
 
21           December 31, 1999, shall be amended to be consistent
 
22           with this Act; and [provided that this]
 

 
 
 
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 1      (2)  With the exception of section 3, this Act shall be
 
 2           repealed on July 1, 2005."
 
 3      2.  By repealing section 4.
 
 4      ["SECTION 4.  (a)  There is established, within the
 
 5 department of health for administrative purposes only, the Hawaii
 
 6 mental health insurance task force to study the financial and
 
 7 social implications of mandated equal mental health and substance
 
 8 abuse insurance coverage in Hawaii.
 
 9      (b)  The task force shall be comprised of the following
 
10 twenty-two members:
 
11      (1)  One member of the senate committee on health and human
 
12           services appointed by the president of the senate;
 
13      (2)  One member of the house of representatives committee on
 
14           health appointed by the speaker of the house of
 
15           representatives;
 
16      (3)  One member from each of the following organizations and
 
17           agencies appointed by the governor: 
 
18           (A)  Hawaii Medical Service Association;
 
19           (B)  Kaiser Permanente Medical Care Program;
 
20           (C)  Department of human services;
 
21           (D)  Department of health;
 
22           (E)  Equal Insurance Coalition;
 
23           (F)  NAMI, Oahu;
 

 
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 1           (G)  Hawaii Psychological Association;
 
 2           (H)  Chamber of Commerce of Hawaii;
 
 3           (I)  Hawaii Psychiatric Medical Association;
 
 4           (J)  Hawaii Business Health Council;
 
 5           (K)  Hawaii Medical Association;
 
 6           (L)  Mental Health Association of Hawaii;
 
 7           (M)  National Federation of Independent Businesses;
 
 8           (N)  Hawaii Nurses' Association; and
 
 9           (O)  Hawaii Building and Trades Council;
 
10      (4)  The following members to be appointed by the task
 
11           force:
 
12           (A)  Two members representing mental health consumers;
 
13                and
 
14           (B)  One member representing small business
 
15                organizations in the state;
 
16      (5)  The insurance commissioner; and
 
17      (6)  One member representing the University of Hawaii school
 
18           of public health, with expertise in biomedical
 
19           statistics or economics.
 
20      (c)  The task force shall:
 
21      (1)  Investigate ways to define and quantify unmet mental
 
22           health and substance abuse needs in the State, and
 
23           shall analyze possible outcome data collection measures
 
24           in order to meaningfully measure and describe:
 

 
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 1           (A)  The efficacy of mental health and substance abuse
 
 2                treatment in the State; and
 
 3           (B)  Unmet mental health and substance abuse treatment
 
 4                needs;
 
 5      (2)  Describe mental health and substance abuse coverage in
 
 6           the State, including deductibles, copayments, and
 
 7           covered illnesses and conditions;
 
 8      (3)  Describe the relative costs of mental illness and
 
 9           substance abuse coverage, and other health coverage in
 
10           the State;
 
11      (4)  Describe mental health and substance abuse treatment
 
12           utilization in the State by adults, adolescents, and
 
13           children;
 
14      (5)  Produce an analysis of the needs of individuals who
 
15           have exhausted their mental health or substance abuse
 
16           treatment benefits;
 
17      (6)  Determine the effect of mandated serious mental illness
 
18           benefits parity on mental health and substance abuse
 
19           services consumers, affected health plans, businesses,
 
20           and other concerned parties, including a review of the
 
21           experience of health plans in providing the coverage,
 
22           and an assessment of any impact on costs, services
 
23           provided, and services utilization; and
 

 
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 1      (7)  Develop treatment and utilization guidelines for
 
 2           severe, biologically-based mental illnesses in addition
 
 3           to those covered under this Act, including, but not
 
 4           limited to:
 
 5           (A)  Major depression;
 
 6           (B)  Obsessive compulsive disorders;
 
 7           (C)  Severe panic disorders;
 
 8           (D)  Autism and pervasive development disorders;
 
 9           (E)  Multiple personality disorder (disassociative
 
10                disorder);
 
11           (F)  Brain damage or disfunction as defined by
 
12                neuropsychological testing; and
 
13           (G)  Other severe and disabling mental disorders such
 
14                as severe anorexia, severe attention-
 
15                deficit/hyperactivity disorder, and severe
 
16                dyslexia.
 
17      (d)  The task force shall perform its duties as follows:
 
18      (1)  The task force shall not utilize any moneys from the
 
19           general fund to support its functions.  Members shall
 
20           serve without compensation;
 
21      (2)  A simple majority of the members of the task force
 
22           shall constitute a quorum for the transaction of
 
23           business, and all actions of the task force shall
 

 
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 1           require the affirmative vote of a majority of the
 
 2           members present;
 
 3      (3)  The task force may hold public hearings as frequently
 
 4           as deemed necessary and feasible to receive testimony
 
 5           on issues relative to the task force's investigation;
 
 6           and
 
 7      (4)  The task force may invite participants, including the
 
 8           auditor or the auditor's representative, as deemed
 
 9           necessary to effectuate its purposes.
 
10      (e)  The task force shall submit a report of its findings
 
11 and recommendations to the speaker of the house of
 
12 representatives, the president of the senate, and the governor no
 
13 later than twenty days before the convening of the regular
 
14 session of 2001, and shall be dissolved upon submittal of its
 
15 report.  Provided that the task force shall submit the report of
 
16 its findings and recommendations concerning treatment and
 
17 utilization guidelines as required under subsection (c)(7) of
 
18 this section, to the speaker of the house of representatives, the
 
19 president of the senate, and the governor no later than twenty
 
20 days before the convening of the regular session of 2000."]
 
21      SECTION 6.  Statutory material to be repealed is bracketed.
 
22 New statutory material is underscored.
 

 
 
 
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 1      SECTION 7.  This Act shall take effect on July 1, 2000, and
 
 2 shall apply to policies issued or renewed after December 31,
 
 3 2000.