Mental Health Parity.

State and federal law require health insurers to provide coverage for mental health services on the same terms that medical and surgical benefits are covered.

Mental Health Parity and Addiction Equity Act.
The Mental Health Parity and Addiction Equity Act (MHPAEA), and its implementing regulations and guidance, prohibits health plans that cover mental health and substance use disorder (SUD) benefits from imposing limitations on these benefits that are less favorable than the limitations imposed on medical and surgical benefits.  On September 23, 2024, the Department of Labor, the Department of Health and Human Services (HHS), and the Department of the Treasury issued final rules that went into effect November 22, 2024, establishing new requirements for implementing the nonquantitative treatment limitation comparative analyses requirements under the MHPAEA.  The rules prohibit health plans from using nonquantitative treatment limitation that place greater restrictions on access to mental health and substance use disorder benefits as compared to medical or surgical benefits.  The rules also set forth the content requirements for nonquantitative treatment limitation comparative analyses and specify how plans must make these comparative analyses available to the federal agencies, state authorities, beneficiaries, and enrollees.

Washington's Mental Health Parity Act.
In 2007 the Mental Health Parity Act was enacted and established definitions for mental health services and requirements to cover mental health services in the same manner as medical and surgical benefits for the different types of health carriers.  Mental Health Services are defined as follows:

• for health benefit plans issued or renewed on or after January 1, 2021, medically necessary outpatient and inpatient services provided to treat mental disorders covered by the diagnostic categories listed in the most current version of the diagnostic and statistical manual of mental disorders, published by the American Psychiatric Association (APA), on June 11, 2020, or such subsequent date as provided by the Insurance Commissioner (Commissioner) in rule, with the exception of the following categories, codes, and services:  (i) substance related disorders; (ii) life transition problems, currently referred to as "V" codes, and diagnostic codes 302 through 302.9 as found in the diagnostic and statistical manual of mental disorders, 4th edition, published by the APA; (iii) skilled nursing facility services, home health care, residential treatment, and custodial care; and (iv) court-ordered treatment unless the insurer's medical director or designee determines the treatment to be medically necessary; and
• for a health benefit plan or a plan deemed by the Commissioner to have a short-term limited purpose or duration, or to be a student-only health plan issued or renewed on or after January 1, 2021, medically necessary outpatient and inpatient services provided to treat mental health and SUDs covered by the diagnostic categories listed in the most current version of the diagnostic and statistical manual of mental disorders, published by the APA, on June 11, 2020, or a subsequent date as provided by the Commissioner by rule.

The copayment or coinsurance for mental health services and prescription drugs to treat mental health conditions may be no more than the copayment or coinsurance for medical and surgical services and prescription drugs.  If the health plan imposes any deductible, mental health services must be included with medical and surgical services for the purpose of meeting the deductible requirement. 

Medically Necessary. 
Health plans generally only cover services that are medically necessary.  How medically necessary is defined generally depends on the circumstance and the health plan.  For purposes of Medicaid, the Health Care Authority defines "medically necessary" as a term for describing a requested service which is reasonably calculated to prevent, diagnose, correct, cure, alleviate or prevent worsening of conditions in the client that endanger life, or cause suffering or pain, or result in an illness or infirmity, or threaten to cause or aggravate a handicap, or cause physical deformity or malfunction.  There is no other equally effective, more conservative or substantially less costly course of treatment available or suitable for the client requesting the service. 

Utilization Management.
Health carriers must maintain a documented utilization review program description and written utilization review criteria that is based on reasonable medical evidence.  The program must include a method for reviewing and updating criteria.  Health carriers must make clinical protocols, medical management standards, and other review criteria available upon request to participating providers.

Prohibited Utilization Management.
A health carrier may not require utilization management or review for an initial evaluation and management visit and up to six consecutive treatment visits in a new episode of care for the following types of services:  chiropractic, physical therapy, occupational therapy, acupuncture and Eastern medicine, massage therapy, or speech and hearing therapy.  Coverage for these visits may not be denied or limited on the basis of medical necessity or appropriateness and may not be retroactively denied. 

Prescription Drug Utilization Management.
Clinical review criteria used to establish a prescription drug utilization management protocol must be evidence-based and updated on a regular basis through review of new evidence, research, and newly developed treatments.  When coverage of a prescription drug for the treatment of any medical condition is subject to prescription drug utilization management, the patient and the prescribing practitioner must have access to a clear, readily accessible, and convenient process to request an exception.  Once all required information is received, a health carrier or prescription drug utilization management entity must, within three business days for nonurgent requests and one business day for urgent requests, approve a request if the information provided meets the exception criteria or if deemed medically appropriate, or deny the request.

Prior Authorization. 
A health carrier's prior authorization requirements must be described in detail and written in easily understandable language.  The carrier must make its most current prior authorization requirements and restrictions, including the written clinical review criteria, available to providers and facilities.  The prior authorization requirements must be based on peer-reviewed clinical review criteria that must be evidence-based and must accommodate new and emerging information related to the appropriateness of clinical criteria with respect to Black and Indigenous people, other people of color, gender, and underserved populations.  The clinical review criteria must be evaluated and updated, if necessary, at least annually.

Comprehensive Grievance and Appeal Processes and Independent Review. 
Each carrier and health plan must have fully operational, comprehensive grievance and appeal processes, and for plans that are not grandfathered, fully operational, comprehensive, and effective grievance and review of adverse benefit determination processes. 

An enrollee may seek review by a certified independent review organization of a health carrier's decision to deny, modify, reduce, or terminate coverage of or payment for a health care service, or of any adverse determination made by a carrier after exhausting the carrier's grievance process and receiving a decision that is unfavorable to the enrollee, or after the carrier has exceeded the timelines for grievances, without good cause and without reaching a decision.  The medical reviewers from a certified independent review organization must make determinations regarding the medical necessity or appropriateness of, and the application of health plan coverage provisions to, health care services for an enrollee.  The medical reviewers' determinations must be based upon their expert medical judgment after consideration of relevant medical, scientific, and cost-effectiveness evidence and medical standards of practice in Washington.  The certified independent review organization must ensure that determinations are consistent with the scope of covered benefits as outlined in the coverage agreement.  Medical reviewers may override the health plan's medical necessity or appropriateness standards if the standards are determined to be unreasonable or inconsistent with sound, evidence-based medical practice.

Carrier Overpayment Recovery. 
Except in the case of fraud or other specified circumstances, a carrier may not request a refund from a health care provider of a payment previously made to satisfy a claim unless it does so in writing to the provider within 24 months after the date that the payment was made.  Any such request must specify why the carrier believes the provider owes the refund.  For payments related to coordination of benefits with another carrier or responsible entity, a carrier may only request a refund from a health care provider of a payment previously made to satisfy a claim within 30 months of the payment.

Mental Health Parity.

Washington's Mental Health Parity Act.
The Mental Health Parity Act statutes found in the chapters covering the different types of health carriers are repealed and the definition of "mental health services" from the Mental Health Parity Act is recodified and expanded.  For a health plan or a plan deemed by the Commissioner to have a short-term limited purpose or duration, or to be a student-only health plan, issued or renewed on or after January 1, 2027, "mental health and SUD services" are medically necessary outpatient services, residential care, partial hospitalization services, inpatient services, and prescription drugs provided to treat mental health or SUDs are covered by the diagnostic categories listed in the: 

• most current version of the Diagnostic and Statistical Manual of Mental Disorders, published by the APA on June 11, 2020, or a subsequent date as provided by the Commissioner by rule;
• Mental, Behavioral, and Neurodevelopmental chapters of the version available on January 13, 2025, of the International Classification of Diseases adopted by the federal HHS or any subsequent version as determined by the Commissioner in rule; or
• DC:0-5 Diagnostic Classification of Mental Health and Developmental Disorders in Infancy and Early Childhood available on January 13, 2025, or any subsequent version as determined by the Commissioner in rule.

Each health plan, including limited duration and student-only plans, providing coverage for medical and surgical services must provide coverage for mental health and SUD services.  Any cost-sharing for mental health and SUD services and any treatment limitations related to mental health and SUD services must comply with the quantitative and nonquantitative treatment limitation requirements in the MHPAEA rules issued September 23, 2024.  Quantitative treatment limitations and nonquantitative treatment limitations, including any referral and prescription requirements, for mental health or SUD care must comply with the requirements of the MHPAEA, any implementing regulations, and state law.

General Provisions.
A health carrier may not limit benefits or coverage for medically necessary mental health or SUD services on the basis that those services should or could be covered by a public entitlement program.  This prohibition does not require a carrier to cover benefits that have been authorized and provided for a covered person by a public entitlement program, except as otherwise required by law.

If a health carrier provides any benefits for a mental health condition or an SUD in any classification of benefits, it must provide meaningful benefits for that mental health condition or SUD in every classification in which medical or surgical benefits are provided.  A health carrier does not provide meaningful benefits unless it provides benefits for a core treatment for that condition or disorder in each classification in which the health carrier provides benefits for a core treatment for one or more medical conditions or surgical procedures.

Following an adverse benefit determination, if a covered person requests a nonquantitative treatment limitation parity compliance analyses, the health carrier must provide the requested analyses free of charge within 30 days.

Utilization Review.
Utilization review and clinical review criteria may not deviate from generally accepted standards of mental health and SUD care.  In conducting utilization reviews relating to service intensity or level of care placement, continued stay, or transfer or discharge, the health carrier must apply relevant age-appropriate patient placement criteria from nonprofit professional associations and authorize placement consistent with the criteria.  The health carrier may not apply conflicting or more restrictive criteria.  A carrier may use software-based clinical decision support tools, including those developed by commercial entities, if the tools incorporate and apply with fidelity the relevant age-appropriate patient placement criteria as required.

If the carrier’s application of the required age-appropriate patient placement criteria is not consistent with the service intensity or level of care placement requested by the covered person or their provider, any adverse benefit determination notice must include details of the carrier’s assessment under the relevant criteria.  A carrier may use patient placement criteria in addition to the required age-appropriate placement criteria only to approve requested services, but may not rely on additional patient placement criteria to deny, restrict, or limit access to requested services.  Carriers must comply with any oversight measures deemed appropriate by the Commissioner.

Clinical Review Criteria.
For mental health and SUD services, the documented utilization review program and written utilization review criteria carriers must maintain is modified to require health carriers to use clinical review criteria that meets the above requirements for these services.  For prescription drugs prescribed to treat mental health or SUD conditions, clinical review criteria used to establish a prescription drug utilization management protocol must meet the above requirements.  Clinical review criteria used for purposes of reviewing and deciding upon prior authorization requests related to mental health and SUD services must meet the above requirements.

For purposes of independent reviews regarding mental health and SUD services, medical reviewers must conduct reviews and make determinations consistent with the above requirements. 

Mental Health Parity and Addiction Equity Act.
The requirements of the final rules issued on September 23, 2024, related to the MHPAEA and any guidance issued by federal agencies to implement the rules are incorporated into the above requirements.

Enforcement.
The above provisions apply to any health care benefit manager or contracted provider that performs utilization review functions on a health carrier's behalf.

Other Provisions.

A health carrier may not request a refund of amounts paid to a provider from that provider for mental health and SUD services more than six months after the date of payment or for payments involving coordination with another carrier or entity nine months after the date of payment, except in cases of fraud.

A health carrier may not require utilization management or review, or prior authorization, for an initial evaluation and management visit and up to six consecutive treatment visits in a new episode of care for outpatient mental health care and outpatient SUD care office visits.  Coverage for these visits may not be denied or limited on the basis of medical necessity or appropriateness and may not be retroactively denied.

Definitions.

"Medically necessary" means a service or product addressing the specific needs of a patient, for the purpose of screening, preventing, diagnosing, managing, or treating an illness, injury, condition, or its symptoms, including minimizing the progression of an illness, injury, condition, or its symptoms, in a manner that is: 

• in accordance with generally accepted standards of mental health and SUD care;
• clinically appropriate in terms of type, frequency, extent, site, and duration of a service or product; and
• not primarily for the economic benefit of the insurer or for the convenience of the patient or treating provider.

"Clinical review criteria" means written guidelines, standards, protocols, or decision rules used by a health carrier, or health care benefit manager on behalf of a health carrier, during utilization review to evaluate the medical necessity of a patient's requested health care services.

"Generally accepted standards of mental health and SUD care" means standards of care and clinical practice that are generally recognized by health care providers practicing in relevant clinical specialties.

"Core treatment" means a standard treatment or course of treatment, therapy, service, or intervention indicated by generally accepted standards of mental health and SUD care for a condition or disorder.

"Nonprofit professional association" means a not-for-profit health care provider professional association or specialty society that is generally recognized by clinicians practicing in the relevant clinical specialty and issues peer-reviewed guidelines, criteria, or other clinical recommendations developed through a transparent process.

Rulemaking.
The Commissioner may adopt rules necessary to implement the act, including requiring submission of quantitative data to determine in-operation parity compliance.

If specific funding is not provided for the bill by June 30, 2025, the bill is null and void.