REPORT TITLE:
Mental Health Parity


DESCRIPTION:
Requires health insurers to equitably reimburse providers for
mental health treatment.  (SD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2891
THE SENATE                              S.B. NO.           S.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 of the 1999 Session
 
 6 Laws of Hawaii requires removal of these limits for serious
 
 7 mental illnesses including schizophrenia, schizo-affective
 
 8 disorder, and bipolar mood disorder.  Limits were not removed for
 
 9 other mental health conditions or disorders of adults or children
 
10 that fall under other diagnostic categories of the Mental
 
11 Disorders Section of the International Classification of Diseases
 
12 or the Diagnostic and Statistical Manual of the American
 
13 Psychiatric Association.
 
14      National trends in mental health care are towards expansion
 
15 of mandated mental health treatment benefits through parity with
 
16 other physical illnesses.  This trend is based on the assumption
 
17 that it is discriminatory to restrict or offer less access to
 
18 health care in the area of mental health than other areas of
 
19 health care.  For example, if an insurance policy does not place
 
20 limits on physical health care treatment, it can not put limits
 

 
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 1 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 Hawaii with five per cent or fewer subscribers utilizing
 
 6 mental health services.  When individuals utilize outpatient
 
 7 mental health services, seventy-five per cent utilize five or
 
 8 fewer visits, seventeen per cent utilize six to ten visits, six
 
 9 per cent utilize eleven to fifteen visits, one and one-half per
 
10 cent utilize sixteen to twenty visits, and less than one per cent
 
11 utilize twenty or more visits.  Evidence suggests that
 
12 individuals who utilize more than twenty mental health visits
 
13 suffer from substantial impairment and disability.  Chapter 431M,
 
14 Hawaii Revised Statutes, does not ensure that the treatment needs
 
15 of this small group are effectively met.  Because of the overall
 
16 low utilization of mental health treatment services, the cost of
 
17 providing coverage to this small group is minimal because costs
 
18 are spread across the larger risk pool.  Analysis of national
 
19 data suggest that minimal costs will be associated with providing
 
20 full parity in health insurance coverage for this population.
 
21 Because Hawaii already has a strong mandated minimum mental
 
22 health benefit, the costs of providing full mental health parity
 
23 will be less than national estimates.  Nationally, it is
 

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

 
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 1 psychological, biological, or behavioral abnormalities that
 
 2 results in personal distress or suffering, impairment of capacity
 
 3 for functioning, or both.  For the purposes of this chapter, the
 
 4 terms "mental disorder" and "mental illness" shall be used
 
 5 interchangeably and shall include the definitions identified in
 
 6 the most recent publications of the Diagnostic and Statistical
 
 7 Manual of the American Psychiatric Association or International
 
 8 Classifications of Disease.  Epilepsy, senility, mental
 
 9 retardation, or other development disabilities and addiction to
 
10 or abuse of intoxicating substances do not in and of themselves
 
11 constitute a mental disorder.] any mental health condition or
 
12 disorder of adults or children that falls under any of the
 
13 diagnostic categories listed in the Diagnostic and Statistical
 
14 Manual of the American Psychiatric Association, as revised,
 
15 except for alcohol or substance use or abuse disorders listed as
 
16 codes 291.00 to 292.99 and 303.00 to 305.99, or in the Mental
 
17 Disorders Section of the International Classification of Disease
 
18 (as used for billing purposes), as revised."
 
19      SECTION 3.  Section 431M-1, Hawaii Revised Statutes, is
 
20 amended by deleting the definition of "serious mental illness".
 
21      [""Serious mental illness" means schizophrenia, schizo-
 
22 affective disorder, and bipolar mood disorder, as defined in the
 
23 most recent version of the Diagnostic and Statistical Manual of
 

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

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

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

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

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

 
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 1           in consultation with the physician or psychologist[;
 
 2      (2)  In-hospital and nonhospital residential mental health
 
 3           services as a covered benefit under this chapter shall
 
 4           be provided in a hospital or a nonhospital residential
 
 5           facility.  The services to be covered shall include
 
 6           those services required for licensure and
 
 7           accreditation, and shall be included as part of the
 
 8           covered in-hospital services as specified in subsection
 
 9           (a);
 
10      (3)  Mental health partial hospitalization as a covered
 
11           benefit under this chapter shall be provided by a
 
12           hospital or a mental health outpatient facility.  The
 
13           services to be covered under this paragraph shall
 
14           include those services required for licensure and
 
15           accreditation and shall be included as part of the
 
16           covered in-hospital services as specified in subsection
 
17           (a); and
 
18      (4)  Mental health outpatient services shall be a covered
 
19           benefit under this chapter and shall be included as
 
20           part of the covered outpatient services as specified in
 
21           subsection (a)]."
 
22      SECTION 5.  Section 431M-5, Hawaii Revised Statutes, is
 
23 repealed.
 

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

 
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 1 rates, terms, or conditions are not applied to services for other
 
 2 medical or surgical conditions.  This subsection shall not apply
 
 3 to individual or group hospital or medical service plan
 
 4 contracts, and nonprofit mutual benefit association and health
 
 5 maintenance organization health plan contracts providing coverage
 
 6 to employers with twenty-five or fewer employees, and government
 
 7 employee health benefits plans under chapter 87; and provided
 
 8 further that this subsection shall not apply to QUEST medical
 
 9 plans under the department of human services until July 1,
 
10 2002."]
 
11      SECTION 6.  Act 121, Session Laws of Hawaii 1999, is amended
 
12 by repealing section 4.
 
13      ["SECTION 4.  (a)  There is established, within the
 
14 department of health for administrative purposes only, the Hawaii
 
15 mental health insurance task force to study the financial and
 
16 social implications of mandated equal mental health and substance
 
17 abuse insurance coverage in Hawaii.
 
18      (b)  The task force shall be comprised of the following
 
19 twenty-two members:
 
20      (1)  One member of the senate committee on health and human
 
21           services appointed by the president of the senate;
 
22      (2)  One member of the house of representatives committee on
 
23           health appointed by the speaker of the house of
 

 
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 1           representatives;
 
 2      (3)  One member from each of the following organizations and
 
 3           agencies appointed by the governor: 
 
 4           (A)  Hawaii Medical Service Association;
 
 5           (B)  Kaiser Permanente Medical Care Program;
 
 6           (C)  Department of human services;
 
 7           (D)  Department of health;
 
 8           (E)  Equal Insurance Coalition;
 
 9           (F)  NAMI, Oahu;
 
10           (G)  Hawaii Psychological Association;
 
11           (H)  Chamber of Commerce of Hawaii;
 
12           (I)  Hawaii Psychiatric Medical Association;
 
13           (J)  Hawaii Business Health Council;
 
14           (K)  Hawaii Medical Association;
 
15           (L)  Mental Health Association of Hawaii;
 
16           (M)  National Federation of Independent Businesses;
 
17           (N)  Hawaii Nurses' Association; and
 
18           (O)  Hawaii Building and Trades Council;
 
19      (4)  The following members to be appointed by the task
 
20           force:
 
21           (A)  Two members representing mental health consumers;
 
22                and
 
23           (B)  One member representing small business
 

 
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 1                organizations in the state;
 
 2      (5)  The insurance commissioner; and
 
 3      (6)  One member representing the University of Hawaii school
 
 4           of public health, with expertise in biomedical
 
 5           statistics or economics.
 
 6      (c)  The task force shall:
 
 7      (1)  Investigate ways to define and quantify unmet mental
 
 8           health and substance abuse needs in the State, and
 
 9           shall analyze possible outcome data collection measures
 
10           in order to meaningfully measure and describe:
 
11           (A)  The efficacy of mental health and substance abuse
 
12                treatment in the State; and
 
13           (B)  Unmet mental health and substance abuse treatment
 
14                needs;
 
15      (2)  Describe mental health and substance abuse coverage in
 
16           the State, including deductibles, copayments, and
 
17           covered illnesses and conditions;
 
18      (3)  Describe the relative costs of mental illness and
 
19           substance abuse coverage, and other health coverage in
 
20           the State;
 
21      (4)  Describe mental health and substance abuse treatment
 
22           utilization in the State by adults, adolescents, and
 
23           children;
 

 
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 1      (5)  Produce an analysis of the needs of individuals who
 
 2           have exhausted their mental health or substance abuse
 
 3           treatment benefits;
 
 4      (6)  Determine the effect of mandated serious mental illness
 
 5           benefits parity on mental health and substance abuse
 
 6           services consumers, affected health plans, businesses,
 
 7           and other concerned parties, including a review of the
 
 8           experience of health plans in providing the coverage,
 
 9           and an assessment of any impact on costs, services
 
10           provided, and services utilization; and
 
11      (7)  Develop treatment and utilization guidelines for
 
12           severe, biologically-based mental illnesses in addition
 
13           to those covered under this Act, including, but not
 
14           limited to:
 
15           (A)  Major depression;
 
16           (B)  Obsessive compulsive disorders;
 
17           (C)  Severe panic disorders;
 
18           (D)  Autism and pervasive development disorders;
 
19           (E)  Multiple personality disorder (disassociative
 
20                disorder);
 
21           (F)  Brain damage or disfunction as defined by
 
22                neuropsychological testing; and
 
23           (G)  Other severe and disabling mental disorders such
 

 
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 1                as severe anorexia, severe attention-
 
 2                deficit/hyperactivity disorder, and severe
 
 3                dyslexia.
 
 4      (d)  The task force shall perform its duties as follows:
 
 5      (1)  The task force shall not utilize any moneys from the
 
 6           general fund to support its functions.  Members shall
 
 7           serve without compensation;
 
 8      (2)  A simple majority of the members of the task force
 
 9           shall constitute a quorum for the transaction of
 
10           business, and all actions of the task force shall
 
11           require the affirmative vote of a majority of the
 
12           members present;
 
13      (3)  The task force may hold public hearings as frequently
 
14           as deemed necessary and feasible to receive testimony
 
15           on issues relative to the task force's investigation;
 
16           and
 
17      (4)  The task force may invite participants, including the
 
18           auditor or the auditor's representative, as deemed
 
19           necessary to effectuate its purposes.
 
20      (e)  The task force shall submit a report of its findings
 
21 and recommendations to the speaker of the house of
 
22 representatives, the president of the senate, and the governor no
 
23 later than twenty days before the convening of the regular
 

 
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 1 session of 2001, and shall be dissolved upon submittal of its
 
 2 report.  Provided that the task force shall submit the report of
 
 3 its findings and recommendations concerning treatment and
 
 4 utilization guidelines as required under subsection (c)(7) of
 
 5 this section, to the speaker of the house of representatives, the
 
 6 president of the senate, and the governor no later than twenty
 
 7 days before the convening of the regular session of 2000."]
 
 8      SECTION 7.  Statutory material to be repealed is bracketed.
 
 9 New statutory material is underscored.
 
10      SECTION 8.  This Act shall take effect on July 1, 2000, and
 
11 shall apply to policies issued or renewed after December 31,
 
12 2000.