REPORT TITLE:
Mental Health Parity


DESCRIPTION:
Requires health insurers to equitably reimburse providers for
mental health treatment.

 
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THE SENATE                              S.B. NO.           
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, HRS, requires insurance plans to
 
 2 provide a minimum set of mental health treatment benefits to
 
 3 subscribers.  Generally, the minimum requirements are 30 days of
 
 4 inpatient treatment and 24 outpatient visits per year.  Act 121
 
 5 of the 1999 Session Laws of Hawaii requires removal of these
 
 6 limits for serious mental illnesses including schizophrenia,
 
 7 schizoaffective disorder, and bipolar mood disorder.  Limits were
 
 8 not removed for other mental health conditions or disorders of
 
 9 adults or children that fall under other diagnostic categories of
 
10 the Mental Disorders Section of the International Classification
 
11 of Diseases or the Diagnostic and Statistical Manual of the
 
12 American Psychiatric Association.
 
13      National trends in mental health care are towards expansion
 
14 of mandated mental health treatment benefits through "parity"
 
15 with other physical illnesses.  This trend is based on the
 
16 assumption that it is discriminatory to restrict or offer less
 
17 access to health care in the area of mental health than other
 
18 areas of health care.  For example, if an insurance policy does
 
19 not place limits on physical health care treatment, it can not
 

 
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 1 put limits on mental health treatment benefits.
 
 2      Four legislatively-mandated evaluation reports have reviewed
 
 3 the impact of Hawaii's mental health benefit requirement.  The
 
 4 reports find an overall low utilization of mental health services
 
 5 in Hawai`i with 5% or fewer subscribers utilizing mental health
 
 6 services.  When individuals utilize outpatient mental health
 
 7 services, 75% utilize 5 or fewer visits, 17% utilize 6-10 visits,
 
 8 6% utilize 11-15 visits, 1.5% utilize 16-20 visits, and less than
 
 9 1% utilize 20 or more visits.  Evidence suggests that individuals
 
10 who utilize more than 20 mental health visits suffer from
 
11 substantial impairment and disability.  Chapter 431M does not
 
12 ensure that the treatment needs of this small group are
 
13 effectively met.  Because of the overall low utilization of
 
14 mental health treatment services, the cost of providing coverage
 
15 to this small group is minimal because costs are spread across
 
16 the larger risk pool.  Analysis of national data suggest that
 
17 minimal costs will be associated with providing full parity in
 
18 health insurance coverage for this population.  Because Hawaii
 
19 already has a strong mandated minimum mental health benefit, the
 
20 costs of providing full mental health parity will be less than
 
21 national estimates.  Nationally, it is estimated that premium
 
22 increases of approximately one dollar per member per month or
 
23 less will ensure parity of mental health benefits.
 

 
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 1           Well-defined systems of benefits management, including
 
 2 the practices of prior authorization, reauthorization, concurrent
 
 3 review, the use of standardized clinical protocols and best
 
 4 practices, and other forms of "benefits management" are rapidly
 
 5 changing the landscape of mental health service delivery. The
 
 6 adoption of benefits-management practice has had widespread and
 
 7 continuing impact on the cost of providing mental health
 
 8 services.  A recent report from the RAND Corporation suggests
 
 9 that previous estimates developed 2-3 years ago in the evaluation
 
10 of mental health parity on a federal level overestimate the cost
 
11 of providing unlimited managed mental health care coverage by a
 
12 factor of 4 to 8.  Having a generous benefit design in a health
 
13 plan does not imply high levels of use and costs for mental
 
14 health care.  This bill amends Chapter 431-M, HRS to require
 
15 health insurers to equitably reimburse for mental health
 
16 treatment; It requires full "parity" in mental health treatment
 
17 benefits relative to other health insurance benefits.
 
18      SECTION 2.  Section 431M-1, Hawaii Revised Statutes is
 
19 amended by amending the definition of "mental illness" to read:
 
20     ""Mental illness" means [a syndrome of clinically significant
 
21 psychological, biological, or behavioral abnormalities that
 
22 results in personal distress or suffering, impairment of capacity
 
23 for functioning, or both.  For the purposes of this chapter, the
 

 
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 1 terms "mental disorder" and "mental illness" shall be used
 
 2 interchangeably and shall include the definitions identified in
 
 3 the most recent publications of the Diagnostic and Statistical
 
 4 Manual of the American Psychiatric Association or International
 
 5 Classifications of Disease.  Epilepsy, senility, mental
 
 6 retardation, or other development disabilities and addiction to
 
 7 or abuse of intoxicating substances do not in and of themselves
 
 8 constitute a mental disorder.] any mental health condition or
 
 9 disorder of adults or children that falls under any of the
 
10 diagnostic categories listed in the Diagnostic and Statistical
 
11 Manual of the American Psychiatric Association, as periodically
 
12 revised, or in the Mental Disorders Section of the International
 
13 Classification of Disease, as periodically revised."
 
14      SECTION 3.  Section 431M-1, Hawaii Revised Statutes is
 
15 amended by deleting the definition of "Serious mental illness".
 
16      SECTION 4.  Section 431M-4, Hawaii Revised Statutes is
 
17 amended as follows:
 
18      "(a) The covered benefit for alcohol or drug dependence or
 
19 substance abuse services under this chapter shall not be less
 
20 than thirty days of in-hospital services per year.  Each day of
 
21 in-hospital services may be exchanged for two days of nonhospital
 
22 residential services, two days of partial hospitalization
 
23 services, or two days of day treatment services.  [Visits to a
 

 
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 1 physician, psychologist, clinical social worker, or advanced
 
 2 practice registered nurse with a psychiatric or mental health
 
 3 specialty or subspecialty shall not be less than thirty visits
 
 4 per year to hospital or nonhospital facilities or to mental
 
 5 health outpatient facilities for day treatment or partial
 
 6 hospitalization services.]  Each day of in-hospital services may
 
 7 also be exchanged for two outpatient visits under this chapter;
 
 8 provided that the patient's condition is such that the outpatient
 
 9 services would reasonably preclude hospitalization.  The total
 
10 covered benefit for outpatient services [in subsections (b) and
 
11 (c)]  for alcohol or drug dependence or substance abuse services
 
12 shall not be less than [twenty-four visits per year; provided
 
13 that coverage of twelve of the twenty-four outpatient visits
 
14 shall apply only to the services under subsection (c).] twelve
 
15 visits per year. Deductible and copayment amounts applied to
 
16 alcohol or drug dependence or substance abuse services shall not
 
17 be greater than those applied to other illnesses or diseases.  In
 
18 the case of alcohol and drug dependence benefits, the insurance
 
19 policy may limit the number of treatment episodes but may not
 
20 limit the number to less that two treatment episodes per
 
21 lifetime.  The [other] covered benefits under this chapter shall
 
22 apply to any of the following services: [services in subsection
 
23 (b) or (c).  In the case of alcohol and drug dependence benefits,
 

 
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 1 the insurance policy may limit the number of treatment episodes
 
 2 but may not limit the number to less that two treatment episodes
 
 3 per lifetime.  Nothing in this section shall be construed to
 
 4 limit serious mental illness benefits.
 
 5      (b)  Alcohol and drug dependence benefits.]
 
 6      (1)  Detoxification services as a covered benefit under this
 
 7 chapter shall be provided either in a hospital or in a
 
 8 nonhospital facility which has a written affiliation agreement
 
 9 with a hospital for emergency, medical, and mental health support
 
10 services.  The following services shall be covered under
 
11 detoxification services:
 
12           (A)  Room and board;
 
13           (B)  Diagnostic x-rays;
 
14           (C)  Laboratory testing; and
 
15           (D)  Drugs, equipment use, special therapies, and
 
16 supplies.
 
17           Detoxification services shall be included as part of
 
18 the covered in-hospital services, but shall not be included in
 
19 the treatment episode [limitation, as specified in subsection
 
20 (a);] limitation.
 
21      (2)  Alcohol or drug dependence treatment through in-
 
22 hospital, nonhospital residential or day treatment substance
 
23 abuse services as a covered benefit under this chapter shall be
 

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

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

 
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 1 plan approved by a clinical social worker or an advanced practice
 
 2 registered nurse with a psychiatric or mental health specialty or
 
 3 subspecialty for a patient already under the care or treatment of
 
 4 a physician or psychologist shall be done in consultation with
 
 5 the physician or [psychologist;] psychologist.
 
 6      [(2) In-hospital and nonhospital residential mental health
 
 7 services as a covered benefit under this chapter shall be
 
 8 provided in a hospital or a nonhospital residential facility.
 
 9 The services to be covered shall include those services required
 
10 for licensure and accreditation, and shall be included as part of
 
11 the covered in-hospital services as specified in subsection (a);
 
12      (3)  Mental health partial hospitalization as a covered
 
13 benefit under this chapter shall be provided by a hospital or a
 
14 mental health outpatient facility.  The services to be covered
 
15 under this paragraph shall include those services required for
 
16 licensure and accreditation and shall be included as part of the
 
17 covered in-hospital services as specified in subsection (a); and
 
18      (4)  Mental health outpatient services shall be a covered
 
19 benefit under this chapter and shall be included as part of the
 
20 covered outpatient services as specified in subsection (a).]"
 
21      SECTION 5.  Section 431M-5, Hawaii Revised Statutes, is
 
22 repealed.
 
23      SECTION 6.  Act 121, Session Laws of Hawaii 1999, is amended
 

 
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 1 by repealing section 4.
 
 2      SECTION 7.  Statutory material to be repealed is bracketed.
 
 3 New statutory material is underscored.
 
 4      SECTION 8.  This act shall take effect on July 1, 2000 and
 
 5 shall apply to policies issued or renewed after December 31,
 
 6 2000. 
 
 7 
 
 8                       INTRODUCED BY:  ___________________________
 

 
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