WSR 99-16-106



[ Insurance Commissioner Matter No. R 98-7-- Filed August 4, 1999, 10:48 a.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 98-07-064.

Title of Rule: Mental health benefits.

Purpose: These proposed rules would seek to increase uniformity in the terminology used in the advertising of mental health benefits. This will increase the understanding of the consumer who reads, hears, or views the advertisement. They would also provide guidelines for carriers to fairly advertise these benefits.

Statutory Authority for Adoption: RCW 48.02.060, 48.30.010, 48.44.050, 48.46.200.

Statute Being Implemented: RCW 48.30.040, 48.44.110, 48.46.400.

Summary: These proposed rules would simplify mental health benefit descriptions used in advertising by establishing definitions for terms commonly used to describe these benefits.

Reasons Supporting Proposal: Consumers, providers and insurers have all been frustrated with the lack of common terminology. The current confusion caused by the advertising of benefits has lead to numerous consumer complaints to the commissioner. These proposed rules would increase the consumer's ability to understand what the advertised benefits mean in terms of what benefit is provided by a plan.

Name of Agency Personnel Responsible for Drafting and Implementation: Don Sloma, Olympia, Washington, (360) 586-5597; and Enforcement: Jeffrey Coopersmith, Olympia, Washington, (360) 664-4615.

Name of Proponent: Deborah Senn, Insurance Commissioner, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: The terms and definitions used by health plans in describing their mental health benefits have been the subject of complaints to the commissioner. Consumers and providers of mental health services have been confused about a variety of carrier innovations in managing mental health treatments. Terms are used interchangeably throughout the industry but they may defined or used to mean many different things. These proposed rules would simplify mental health benefit descriptions used in advertising by establishing definitions for terms commonly used to describe these benefits. This would improve the consumer's ability to understand the benefits provided by a plan and compare those benefits to benefits provided by other plans. These proposed rules do not mandate a mental health benefit or regulate the provisions of a benefit that a plan may include. These proposed rules focus on the advertising of a mental health benefit if such a benefit is included and is advertised. The rules would help prevent the possibility of an issuer knowingly or unknowingly using false, misleading or deceptive advertising of a mental health benefit.

Proposal Changes the Following Existing Rules: WAC 284-43-130 is amended to add definitions.

A small business economic impact statement has been prepared under RCW 19.85.

Small Business Economic Impact Statement

Introduction: This report analyzes a proposal to amend existing rules and add new sections regarding the advertising of mental health benefits. These changes are proposed in an effort to make the rules more current, effective, and efficient. This is the second CR-102 that has been filed in this rule making. Considerable portions of the previously published text have been revised or removed. The majority of these changes were made at the request of industry to make the proposed rules easier and less costly to administer. This evaluation is completed to demonstrate that the proposed changes improve the rules without imposing disproportionate costs on small businesses.

Background: The proposed rules aid in clarifying an existing regulation, WAC 284-50-010/230. The regulation was adopted in 1973 and establishes a framework for regulating the advertisement of health insurance.

Consumers, state agencies, providers, and insurers alike have struggled with the terminology surrounding mental health care. Different parties use the same terms with different meanings. Consumers were confused by what the policy was supposed to offer and what it actually did provide. The commissioner received numerous complaints in this area from the public. The commissioner held an open public forum and listened to interested parties. This forum was broadcast throughout the state on TVW. After hearing the concerns associated with this subject, the commissioner decided to review the rules in this area as a part of the regulatory improvement process and see if consumers could be better served.

The commissioner established a working group composed of health care service contractors, health maintenance organizations, mental health providers, mental health advocacy organizations, mental health "carve-out companies," interested state agencies, and consumers. This group held eight public meetings and discussed how the consumers could better understand exactly what benefits the product being advertised actually contains. The rules do not mandate or prescribe mental health benefits but merely bring some certainty and standards to the advertising of offered benefits to better inform consumers and avoid potentially false or misleading advertising. Many ideas were discussed. The proposed rules are a result of the refinement of ideas over time by a diverse group of concerned parties.

As the rule making went through the hearing and comment process, it became clear that carriers had reservations about some aspects of the rule. They suggested changes to or the removal of many questions and definitions. The commissioner considered their comments and balanced their interests with the interests of providers and consumers. The commissioner is now issuing a second CR-102 that addresses many of the issues raised in the first filing. The commissioner will hold another public hearing and, barring any need for changes that arise during the comment period or the hearing, intends to adopt these rules.

The proposed changes should clarify existing requirements and insurers should find it easier to comply with the processes. The existing regulatory scheme will be strengthened, clarified, and streamlined.

Federal and Other State Law: This rule does not conflict with any other federal or state law.

Industry Codes: These proposed rules will apply to health insurance sold in the state of Washington that have a mental health benefit and choose to advertise it. The proposed rules will affect Hospital and Medical Plans (industry code 6324).

Industry Involvement: Many of the substantive issues and concepts have been discussed with members of the regulated industry. Businesses that will be affected by the proposed rules were invited to provide input to the commissioner's staff throughout the rule-writing process. A preproposal statement of inquiry (CR-101) was filed for the rule on March 17, 1998. The CR-101 was sent to all health insurers and was posted on the commissioner's website. Notification that the commissioner would be reviewing this area in the regulatory improvement process was also posted on the commissioner’s website.

The commissioner established a working group composed of health care service contractors, health maintenance organizations, providers, advocacy organizations, "carve-out companies," interested state agencies, and consumers. A mailing list was created prior to the establishment of the workgroup and all parties on that list were kept apprised of all meetings and activities. Any party that asked to be on that mailing list was welcome and the list grew to approximately seventy parties. Several members of industry were active participants in the workgroup, others choose to be apprised via the mailing list. Industry associations were also on the mailing list to enable industry to be represented in that fashion also.

The workgroup met eight times and developed the framework for the rules. All ideas were considered and the group decided that these concepts would be the most beneficial. Proposed draft language was reviewed and critiqued by the group. Many of the concepts and much of the language and changes to earlier drafts of the language were suggested by members of the regulated industry.

It should be noted that not all of the language or concepts proposed by members of the workgroup or the workgroup as a whole were used. The workgroup was repeatedly instructed that their role was strictly advisory and the commissioner would review their recommendations but was not delegating away her responsibility to Washington consumers.

Through the hearing and comments period, the commissioner continued to talk to and receive comments from carriers. The rules have continued to evolve due to their ongoing participation in the process.

Probable Costs: The proposed rules may impose some costs on the regulated industry. The information requested is already widely available from the issuers in various forms but there will be some cost for the issuers to ensure that information the plans that provide mental health benefits meet the requirements of these rules. There will be formatting and printing costs associated with publication. The new materials may replace one or more existing pieces of material leading to some costs offsets.

It was suggested that additional costs could be incurred by adding a listed phone number in the required materials that would allow consumers to ask the issuer about the mental health benefits of a plan. Industry members already have staff time dedicated to answering consumer questions about mental health benefits, this phone number will enable consumers to go directly to an employee who can address their issues. Any increase in staff time due to additional calls will lead to better informed consumers. This will take on a preventive role by avoiding possible conflicts or grievances by consumers at later stages and will offset some costs if not actually save money for the issuers. The line should have some nominal costs to the issuers if a new line needs to be added or an existing line is rerouted for the purposes of this rule.

There are no additional reporting requirements associated with these rules. As with any printed piece of advertising, the insurers would have to maintain the records of the advertisement ( WAC 284-50-200). The information created for these rules is generally provided in some amount in some fashion currently. Any new materials will replace existing materials. There may be some additional cost in maintaining records though.

It should be noted also that these rules will give guidelines and definition to the area of advertising mental health benefits. Currently, many consumers are confused about what the benefit they see or hear advertised actually delivers. They often believe the advertised benefit is more substantial than the benefit they receive. The commissioner has the authority to remove any carrier material from the marketplace if it is false or misleading. The commissioner has chosen to try to illuminate a path for carriers to fairly advertise their mental health benefit to consumers. Without these rules, the area is much less well-defined and the commissioner may be forced to begin removing entire stocks of advertising materials from the marketplace. The commissioner would prefer to avoid that costly and confrontational approach. It does not serve any of the affected parties as well as giving guidance and providing standards in this area.

Small Business Impact: The proposed rules do not impose a disproportionately higher economic burden on small business within the four-digit classifications. It is probable that small businesses will have an easier time and have a smaller economic burden in complying than larger businesses. A document must be created that details the mental health benefit of the plan that is advertised (again, if the benefit is not advertised, these rules do not apply). The more numerous plans offered, the greater the amount of time necessary to review the plans and the more materials that must be developed to ensure compliance. Administrative and labor time and publication costs will be higher for the larger carriers who offer more plans. Smaller carriers have fewer plans and will require less time to review their plans, create the documents to comply, and to remain in compliance. Smaller carriers will spend less proportional time and money on the administrative and organizational requirements necessary to comply. They will be able to more quickly comply and remain in compliance with the rule because they will be required to develop, print, and distribute fewer new materials.

Mitigation: Mitigation to reduce the economic impact of the proposed rules on small business was considered and acted upon. The commissioner worked with representatives of the industry to limit costs as much as possible while retaining the efficacy of the rules. The workgroup sought to craft language that would ensure that an issuer would not have to make available these materials in combination with every advertisement. Instead, the materials need only be presented one time.

The content of the rules also evolved with the participation of members of industry. The questions and list of answers were developed by the workgroup. Industry involvement enabled mitigatory steps to be taken early on in the process. The questions that are asked were developed to present the most useful information in the least costly manner. Some questions were altered because it would be too costly or time-consuming for carriers to develop the responses. The workgroup developed a list of answers to the questions to be used to describe the benefit. Industry will not have to analyze work on answers but can choose the answer that best describes the plan.

In the second published version of these rules, numerous questions in the proposed rules were removed in an attempt to reduce the costs of implementation and administration of the rule while providing the clearest information available in the advertising of the mental health benefits. Seven questions were retained, eleven questions were removed. Carriers will spend less time answering and formatting questions and should be able to publish the information in a more cost-effective manner. As questions were removed, definitions used in those questions became unnecessary. Other definitions were revised after reviewing comments made during the rule-making process and at the hearing. The rules are tighter, more narrowly focused and easier to comply with than in their earlier incarnation.

An additional mitigatory measure is to delay the effective date of these rules to enable the issuers to have ample time to prepare the necessary information and to use up their available stocks of related information. The rules would not apply to contracts issued before January 1, 2000.

A mitigatory measure in the previous version of the rules that ended up being removed from the second version of these rules was to allow the issuer to use a "code word" or standardized term to describe their mental health benefit instead of providing answers to the required questions. The terms would have provided the consumer with a quick general standard. There are three levels: Level A; Level B; and Level C. The carriers involved in the workgroup and those that chose to comment on the rules rejected this option. The benefit level was rejected for many reasons. It was perceived as mandating a standard of care and injecting value-based opinions into the rules. Neither of these criticisms is accurate. There was no mandate because no standard or coverage of care was imposed. Carriers could use the levels of care to describe their product, or not, at their option. Since carriers universally rejected this option, the commissioner withdrew it at their request.

A second mitigatory measure that was rejected by industry was a provision that allowed the carrier to request the commissioner to publish a document that categorized any of their plans, the commissioner would do so and the carrier would submit that document to consumers instead of the required materials. Similar to the benefit levels, carriers in the workgroup and those that made comments regarding the rule expressed skepticism and great reluctance to use this option. No carrier stated that they would choose this option if available. The commissioner decided that if industry was hostile to this attempt to mitigate the costs of the rules, the option would be withdrawn. The commissioner believed that this system could have saved industry much of the time and money that they state the rule may incur but the carriers simply did not express any interest in this option.

These mitigatory measures should reduce costs on all businesses, particularly small businesses.

Conclusion: These rules should not have a disproportionate impact on small businesses. Costs and administrative concerns should be proportionate to the size of the business or may even be greater for the larger businesses. The information is similar to information that carriers currently make available in some form to consumers, it will be presented in terms and in a method to make it more understandable and useful to the consumer. Mitigatory measures have lessened possible impacts on all businesses, including small businesses. The removal of numerous questions and definitions will lessen the costs and ease the administration of these rules. The revised proposed rules add additional flexibility to the rules and should significantly lessen possible administrative and compliance costs. The commissioner will continue the dialogue with consumers and industry and will consider further mitigatory measures if they do not undercut the goals of the rule making.

A copy of the statement may be obtained by writing to Kacy Brandeberry, Administrative Rules Coordinator, P.O. Box 40255, Olympia, WA 98504-0255, phone (360) 664-3784, fax (360) 664-2782.

RCW 34.05.328 applies to this rule adoption.

Hearing Location: 14th and Water, Cherberg Building, Senate Hearing Room 4, Olympia, Washington, on September 7, 1999, at 10:00 a.m.

Assistance for Persons with Disabilities: Contact Lorie Villaflores by September 6, 1999, TDD (360) 407-0409.

Submit Written Comments to: Kacy Brandeberry, P.O. Box 40255, Olympia, WA 98504-0255, Internet e-mail, fax (360) 664-2782, by September 3, 1999.

Date of Intended Adoption: September 8, 1999.

August 4, 1999

Robert A. Harkins

Chief Deputy Commissioner


AMENDATORY SECTION(Amending Order R 97-3, filed 1/22/98, effective 2/22/98)

WAC 284-43-130

Except as defined in other subchapters and unless the context requires otherwise, the following definitions shall apply throughout this chapter.

(1) (("Covered benefits" means those health care services to which a covered person is entitled under the terms of a health plan.)) "Covered health condition" means any disease, illness, injury or condition of health risk covered according to the terms of any health plan.

(2) "Covered person" means an individual covered by a health plan including an enrollee, subscriber, policyholder, or beneficiary of a group plan.

(3) "Emergency medical condition" means the emergent and acute onset of a symptom or symptoms, including severe pain, that would lead a prudent layperson acting reasonably to believe that a health condition exists that requires immediate medical attention, if failure to provide medical attention would result in serious impairment to bodily functions or serious dysfunction of a bodily organ or part, or would place the person's health in serious jeopardy.

(4) "Emergency services" means otherwise covered health care services medically necessary to evaluate and treat an emergency medical condition, provided in a hospital emergency department.

(5) "Enrollee point-of-service cost-sharing" or "cost-sharing" means amounts paid to health carriers directly providing services, health care providers, or health care facilities by enrollees and may include copayments, coinsurance, or deductibles.

(6) "Facility" means an institution providing health care services, including but not limited to hospitals and other licensed inpatient centers, ambulatory surgical or treatment centers, skilled nursing centers, residential treatment centers, diagnostic, laboratory, and imaging centers, and rehabilitation and other therapeutic settings.

(7) "Grievance" means a written complaint submitted by or on behalf of a covered person regarding:

(a) Denial of health care services or payment for health care services; or

(b) Issues other than health care services or payment for health care services including dissatisfaction with health care services, delays in obtaining health care services, conflicts with carrier staff or providers, and dissatisfaction with carrier practices or actions unrelated to health care services.

(8) "Health care provider" or "provider" means:

(a) A person regulated under Title 18 RCW or RCW 70.127, to practice health or health-related services or otherwise practicing health care services in this state consistent with state law; or

(b) An employee or agent of a person described in (a) of this subsection, acting in the course and scope of his or her employment.

(9) "Health care service" or "health service" means that service offered or provided by health care facilities and health care providers relating to the prevention, cure, or treatment of illness, injury, or disease.

(10) "Health carrier" or "carrier" means a disability insurance company regulated under chapter 48.20 or 48.21 RCW, a health care service contractor as defined in RCW 48.44.010, and a health maintenance organization as defined in RCW 48.46.020.

(11) "Health plan" or "plan" means any individual or group policy, contract, or agreement offered by a health carrier to provide, arrange, reimburse, or pay for health care service except the following:

(a) Long-term care insurance governed by RCW 48.84;

(b) Medicare supplemental health insurance governed by RCW 48.66;

(c) Limited health care service offered by limited health care service contractors in accordance with RCW 48.44.035;

(d) Disability income;

(e) Coverage incidental to a property/casualty liability insurance policy such as automobile personal injury protection coverage and homeowner guest medical;

(f) Workers' compensation coverage;

(g) Accident only coverage;

(h) Specified disease and hospital confinement indemnity when marketed solely as a supplement to a health plan;

(i) Employer-sponsored self-funded health plans;

(j) Dental only and vision only coverage; and

(k) Plans deemed by the insurance commissioner to have a short-term limited purpose or duration, or to be a student-only plan that is guaranteed renewable while the covered person is enrolled as a regular full-time undergraduate or graduate student at an accredited higher education institution, after a written request for such classification by the carrier and subsequent written approval by the insurance commissioner.

(12) "Managed care plan" means a health plan that coordinates the provision of covered health care services to a covered person through the use of a primary care provider and a network.

(13) "Medically necessary" or "medical necessity" in regard to mental health services is a carrier determination as to whether a health service is a covered benefit if the service is consistent with generally recognized standards within a relevant health profession.

(14) "Mental health provider" means a health care provider or a health care facility authorized by state law to provide mental health services.

(15) "Mental health services" means in-patient or out-patient treatment, partial hospitalization or out-patient treatment to manage or ameliorate the effects of a mental disorder listed in the Diagnostic and Statistical Manual (DSM) IV published by the American Psychiatric Association, excluding diagnoses and treatments for substance abuse, 291.0 through 292.9 and 303.0 through 305.9.

(16) "Network" means the group of participating providers and facilities providing health care services to a particular health plan.  A health plan network for carriers offering more than one health plan may be smaller in number than the total number of participating providers and facilities for all plans offered by the carrier.

(((14))) (17) "Out-patient therapeutic visit" or "out-patient visit" means a clinical treatment session with a mental health provider of a duration consistent with relevant professional standards used by the carrier to determine medical necessity for the particular service being rendered, as defined in Physicians Current Procedural Terminology, published by the American Medical Association.

(18) "Participating provider" and "participating facility" means a facility or provider who, under a contract with the health carrier or with the carrier's contractor or subcontractor, has agreed to provide health care services to covered persons with an expectation of receiving payment, other than coinsurance, copayments, or deductibles, from the health carrier rather than from the covered person.

(((15))) (19) "Person" means an individual, a corporation, a partnership, an association, a joint venture, a joint stock company, a trust, an unincorporated organization, any similar entity, or any combination of the foregoing.

(((16))) (20) "Primary care provider" means a participating provider who supervises, coordinates, or provides initial care or continuing care to a covered person, and who may be required by the health carrier to initiate a referral for specialty care and maintain supervision of health care services rendered to the covered person.

(((17))) (21) "Preexisting condition" means any medical condition, illness, or injury that existed any time prior to the effective date of coverage.

(((18))) (22) "Premium" means all sums charged, received, or deposited by a health carrier as consideration for a health plan or the continuance of a health plan.  Any assessment or any "membership," "policy," "contract," "service," or similar fee or charge made by a health carrier in consideration for a health plan is deemed part of the premium.  "Premium" shall not include amounts paid as enrollee point-of-service cost-sharing.

(((19))) (23) "Small group" means a health plan issued to a small employer as defined under RCW 48.43.005(24) comprising from one to fifty eligible employees.

[Statutory Authority: RCW 48.02.060, RCW 48.20.450, RCW 48.20.460, RCW 48.30.010, RCW 48.44.020, RCW 48.44.050, RCW 48.44.080, RCW 48.46.030, RCW 48.46.060(2), RCW 48.46.200 and RCW 48.46.243.   WSR 98-04-005 (Order R 97-3), 284-43-130, filed 1/22/98, effective 2/22/98.]

WAC 284-43-810
Coverage for mental health services.

(1) The commissioner may disapprove any contract issued or renewed after January 1, 2000, that includes coverage for mental health services, and those services are advertised, if it does not include the following statement:


(Health Carrier Name) and state law have established standards to assure the competence and professional conduct of mental health service providers, to guarantee your right to informed consent to treatment, to assure the privacy of your medical information, to enable you to know which services are covered under this plan and to know the limitations on your coverage. If you would like a more detailed description than is provided here of covered benefits for mental health services under this plan, or if you have a question or concern about any aspect of your mental health benefits, please contact us (the health carrier) at xxx-xxx-xxxx (current phone number).

If you would like to know more about your rights under the law, or if you think anything you received from this plan may not conform to the terms of your contract or your rights under the law, you may contact the Office of Insurance Commissioner at 800-562-6900. If you have a concern about the qualifications or professional conduct of your mental health service provider, please call the State Health Department at xxx-xxx-xxxx (current phone number suggested by State Health Department).

(2) The commissioner may disapprove any contract issued or renewed after January 1, 2000, that includes coverage for mental health services, and those services are advertised, if it does not pose and respond in writing to the following questions in language that complies with WAC 284-50-010 through 284-50-230 in or accompanying an invitation to contract which is given to each prospective enrollee prior to enrollment.

(a) "What are the steps that must be taken to have mental health services paid for by my plan?"

Yes No
Direct self referral to a participating provider, with no prior authorization or approval.
Primary care provider referral required; Primary care provider may determine the number of visits.
Preauthorization, predetermination of medical necessity, preverification of benefits and eligibility or referral required.

(b) "What information about my mental condition will anyone other than my mental health provider see?"

No information, other than your diagnostic category and number of treatments you received.
Diagnostic details.
Treatment codes.
Treatment plans, including expected outcomes.
Progress notes.

(c) "Do I have to pay more than the co-pay, deductible and other charges for my other covered medical services to get mental health services under this plan?"

Same Less More
Other cost sharing.

(d) "What is the maximum number of medically necessary in-patient days and out-patient visits I can get each year under this plan?"

Inpatient Outpatient
Days Visits
Less than ten.
Eleven to twenty.
Twenty-one to thirty.
More than thirty.

(e) "What is the average number of outpatient visits this plan pays for per person seeking these services?" (Note to carriers: This response must state the average outpatient visits per enrollee requesting these services during the most recent year for which data is available. This time period may begin no more than thirty-six months prior to the issue date of the policy being sold.)

Less than ten.
Eleven to twenty.
Twenty-one to thirty.
More than thirty.

(f) "In which of the following circumstances where I might need mental health services would I find them excluded or subject to restrictions or limitations other than medical necessity?"
Diagnostic testing to determine if a mental disorder exists.
A mental disorder has a congenital or physical basis, such as Tourette's Syndrome, or may be partially covered under the medical services portion of the health plan.
A court orders treatment.
Treatment surrounding self inflicted harm, such as a suicide attempt.
There are diagnosed learning disabilities.
There is a diagnosed eating disorder.
There is a diagnosed mental disorder related to sexual functioning, or a sex change.
Couples or marriage therapy.
Custodial care.

(g) "What is this plan's most common goal in financing treatment in adults? In children?"

Stabilization and symptom management.
Return to previous functioning.
Ongoing maintenance for long-term illness.