Chapter 1086 Oregon Laws 1999

Session Law

AN ACT

SB 1331

Relating to mental health benefits provided through various health insurance policies offered in this state; creating new provisions; and amending ORS 743.556.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 743.556 is amended to read:

743.556. A group health insurance policy providing coverage for hospital or medical expenses shall provide coverage for expenses arising from treatment for chemical dependency including alcoholism and for mental or nervous conditions. The following conditions apply to the requirement for such coverage:

(1) The coverage may be made subject to provisions of the policy that apply to other benefits under the policy, including but not limited to provisions relating to deductibles and coinsurance. Deductibles and coinsurance for treatment in health care facilities or residential programs or facilities shall be no greater than those under the policy for expenses of hospitalization in the treatment of illness. Deductibles and coinsurance for outpatient treatment shall be no greater than those under the policy for expenses of outpatient treatment of illness.

(2) Treatment provided in health care facilities, residential programs or facilities, day or partial hospitalization programs or outpatient services shall be considered eligible for reimbursement if it is provided by:

(a) Programs or providers described in ORS 430.010 or approved by the office of Alcohol and Drug Abuse Programs or by the Mental Health and Developmental Disability Services Division under subsection (3) of this section.

(b) Programs accredited for the particular level of care for which reimbursement is being requested by the Joint Commission on Accreditation of Hospitals or the Commission on Accreditation of Rehabilitation Facilities.

(c) Inpatient programs provided by health care facilities as defined in ORS 442.015. Residential, outpatient, or day or partial hospitalization programs offered by or through a health care facility must meet the requirements of either paragraph (a) or (b) of this subsection in order to be eligible for reimbursement.

(d) Residential programs or facilities described in subsection (3) of this section if the patient is staying overnight at the facility and is involved in a structured program at least eight hours per day, five days per week.

(e) Programs in which staff are directly supervised or in which individual client treatment plans are approved by a person described in ORS 430.010 (4)(d) and which meet the standards established under subsection (3) of this section.

(3) Subject to ORS 430.065, the office of Alcohol and Drug Abuse Programs shall adopt rules relating to the approval, for insurance reimbursement purposes, of noninpatient chemical dependency programs that are not related to the division or any county mental health program. The Mental Health and Developmental Disability Services Division shall adopt rules relating to the approval, for insurance reimbursement purposes, of noninpatient programs for mental or nervous conditions that are not related to the division or any county mental health program.

(4) A program that provides services for persons with both a chemical dependency diagnosis and a mental or nervous condition shall be considered to be a distinct and specialized type of program for both chemical dependency and mental or nervous conditions. The Mental Health and Developmental Disability Services Division and the office of Alcohol and Drug Abuse Programs jointly shall develop specific standards related to such programs for program approval purposes and shall adopt rules relating to the approval, for insurance reimbursement purposes, of such noninpatient programs that are not related to the office or the division and any county mental health program.

(5) As used in this section:

(a) "Chemical dependency" means the addictive relationship with any drug or alcohol characterized by either a physical or psychological relationship, or both, that interferes with the individual's social, psychological or physical adjustment to common problems on a recurring basis. For purposes of this section, chemical dependency does not include addiction to, or dependency on, tobacco, tobacco products or foods.

(b) "Child or adolescent" means a person who is 17 years of age or younger.

(c) "Facility" means a corporate or governmental entity or other provider of services for the treatment of chemical dependency or for the treatment of mental or nervous conditions.

(d) "Program" means a particular type or level of service that is organizationally distinct within a facility.

(6) Notwithstanding the limits for particular types of services specified in this section, a policy shall not limit the total of payments for all treatment of any kind under this section for chemical dependency, together with payments for all treatment of any kind for mental or nervous conditions, to less than [$10,500] $13,125 for adults and [$12,500] $15,625 for children or adolescents. For persons requesting payments for treatment of any kind for chemical dependency, but not requesting payments for treatment of any kind of mental or nervous condition, a policy shall not limit the total of payments for all treatment to less than [$6,500] $8,125 for adults and [$10,500] $13,125 for children and adolescents.

(7) The limits for mental or nervous conditions specified in this section shall apply to persons with diagnoses of both chemical dependency and mental or nervous conditions, who are being treated for both types of diagnosis, as well as persons with only a diagnosis of a mental or nervous condition.

(8) The higher benefit levels in this section for children or adolescents are in recognition of the longer period of treatment and the greater levels of staffing that may be required for children or adolescents and are intended to permit more services to meet the needs of children and adolescents.

(9) Payments shall not be made under this section for educational programs to which drivers are referred by the judicial system, nor for volunteer mutual support groups.

(10) Except as permitted by subsections (1), (6) and (12) of this section, the policy shall not limit payments for inpatient treatment in hospitals and other health care facilities thereunder:

(a) For chemical dependency to an amount less than [$4,500] $5,625 for adults and [$4,000] $5,000 for children or adolescents; and

(b) For mental or nervous conditions to an amount less than [$4,000] $5,000 for adults and [$6,000] $7,500 for children or adolescents.

(11) Except as permitted by subsections (1), (6) and (12) of this section, the policy shall not limit payments for treatment in residential programs or facilities or day or partial hospitalization programs:

(a) For chemical dependency to an amount less than [$3,500] $4,375 for adults and [$3,000] $3,750 for children or adolescents; and

(b) For mental or nervous conditions to an amount less than [$1,000] $1,250 for adults and [$2,500] $3,125 for children or adolescents.

(12) Notwithstanding the minimum benefits for particular types of services specified in subsections (10) and (11) of this section, and except as permitted by subsection (1) of this section, the policy shall not limit total payments for inpatient, residential and day or partial hospitalization program care or treatment:

(a) For chemical dependency to an amount less than [$8,500] $10,625 for children or adolescents; and

(b) For mental or nervous conditions to an amount less than [$8,500] $10,625 for adults and [$10,500] $13,125 for children or adolescents.

(13) Except as permitted by subsections (1) and (6) of this section, in the case of benefits for outpatient services, the policy shall not limit payments:

(a) For chemical dependency to an amount less than [$1,500] $1,875 for adults and [$2,000] $2,500 for children or adolescents; and

(b) For mental or nervous conditions to an amount less than [$2,000] $2,500.

(14) If so specified in the policy, outpatient coverage may include follow-up in-home service associated with any health care facility, residential, day or partial hospitalization or outpatient services. The policy may limit coverage for in-home service to persons who have completed their initial health care facility, residential, day or partial hospitalization or outpatient treatment and did not terminate that initial treatment against advice. The policy may also limit coverage for in-home service by defining the circumstances of need under which payment will or will not be made.

(15) Under ORS 430.021 and 430.315, the Legislative Assembly has found that health care cost containment is necessary and intends to encourage insurance policies designed to achieve cost containment by assuring that reimbursement is limited to appropriate utilization under criteria incorporated into such policies, either directly or by reference.

(16) A group health insurance policy may provide, with respect to treatment for chemical dependency or mental or nervous conditions, that any one or more of the following cost containment methods shall be in effect and the method or methods used by an insurer in one part of the state may be different from the method or methods used by that insurer in another part of the state:

(a) Proportion of coinsurance required for treatment in residential programs or facilities, day or partial hospitalization programs or outpatient services less than the proportion of coinsurance required for treatment in health care facilities.

(b) Subject to the patient or client confidentiality provisions of ORS 40.235 relating to physicians, ORS 40.240 relating to nurse practitioners, ORS 40.230 relating to psychologists and ORS 40.250 and 675.580 relating to licensed clinical social workers, review for level of treatment of admissions and continued stays for treatment in health care facilities, residential programs or facilities, day or partial hospitalization programs and outpatient services by either insurer staff or personnel under contract to the insurer, or by a utilization review contractor, who shall have the authority to certify for or deny level of payment:

(A) This review shall be made according to criteria made available to providers in advance upon request.

(B) To facilitate implementation of utilization review programs by insurers, the office of the Director of Human Resources shall draft an advisory or model set of criteria for appropriate utilization of inpatient, residential, day or partial hospitalization, and outpatient facilities, programs and services by adults, children and adolescents, and persons with both a chemical dependency diagnosis and a mental or nervous condition. These criteria shall be consistent with this section and shall not be binding on any insurer or other party. However, at the time of contract negotiation or amendment, with the agreement of the parties to the contract, any insurer may adopt the criteria or similar criteria with or without modification. The office of the director shall revise these criteria at least every two years. In developing and revising these criteria, the office of the director shall organize a technical advisory panel including representatives of the Department of Consumer and Business Services, the office of Alcohol and Drug Abuse Programs, the Mental Health and Developmental Disability Services Division, the Health Division, the insurance industry, the business community and providers of each level of care. The office of the director shall place substantial weight on the advice of this panel.

(C) Review shall be performed by or under the direction of a medical or osteopathic physician licensed by the Board of Medical Examiners for the State of Oregon; a psychologist licensed by the State Board of Psychologist Examiners; a nurse practitioner registered by the Oregon State Board of Nursing; or a clinical social worker licensed by the State Board of Clinical Social Workers, with physician consultation readily available. The reviewer shall have expertise in the evaluation of mental or nervous condition services or chemical dependency services.

(D) Review may involve prior approval, concurrent review of the continuation of treatment, post-treatment review or any combination of these. However, if prior approval is required, provision shall be made to allow for payment of urgent or emergency admissions, subject to subsequent review. If prior approval is not required, insurers shall permit treatment providers, policy holders or persons acting on their behalf to make advance inquiries regarding the appropriateness of a particular admission to a treatment program. Insurers shall provide a timely response to such inquiries. Approval of a particular admission does not represent a guarantee of future payment.

(E) An appeals process shall be provided.

(F) An insurer may choose to review all providers on a sampling or audit basis only; or to review on a less frequent basis those providers who consistently supply full documentation, consistent with confidentiality statutes on each case in a timely fashion to the insurer.

(17) For purposes of subsection (16)(b) of this section, a utilization review contractor is a professional review organization or similar entity which, under contract with an insurance carrier, performs certification of reimbursability of level of treatment for admissions and maintained stays in treatment programs, facilities or services.

(18) For purposes of subsection (16)(b) of this section, when implemented through an insurance contract, reimbursability of inpatient treatment requires demonstration that medical circumstances require 24-hour nursing care, or physician or nurse assessment, treatment or supervision that cannot be readily made available on an outpatient basis, or in:

(a) The current living situation;

(b) An alternative, nontreatment living situation;

(d) A day or partial hospitalization program.

(19) For purposes of subsection (16)(b) of this section, when implemented through an insurance contract, reimbursability of treatment at the residential, day or partial hospitalization level of treatment shall require demonstration that outpatient services, if appropriate and less costly than residential, day or partial hospitalization services:

(a) Are not presently appropriate and available;

(b) Cannot be readily and timely made available; and

(c) Cannot meet documented needs for nonmedical supervision, protection, assistance and treatment, either in the current living situation or in a readily and timely available alternative, nontreatment living situation, taking into account the extent of both the available positive support and existing negative influences in the occupational, social and living situations; risks to self or others; and readiness to participate consistently in treatment.

(20) For purposes of subsection (16)(b) of this section, reimbursability of treatment at the level for outpatient facility, service or program shall require demonstration that treatment is justified, considering the individual's history, and the current medical, occupational, social and psychological situation, and the overall prognosis.

(21) Discrete medical or neurologic diagnostic or treatment services including any professional component of that service, costing in excess of $300, occurring concurrently with but not directly related to treatment of mental or nervous conditions shall not be charged against the inpatient benefit level.

(22) The benefits described in this section shall renew in full either on the first day of the 25th month of coverage following the first use of services for the treatment of chemical dependency or mental or nervous conditions, or both, or on the first day following two consecutive contract years.

(23) Health maintenance organizations, as defined in ORS 750.005 (3), shall be subject to the following conditions and requirements in their provision of benefits for chemical dependency or mental or nervous conditions to enrollees:

(a) Notwithstanding the provisions of subsection (1) of this section, health maintenance organizations may establish reasonable provisions for enrollee cost-sharing, so long as the amount the enrollee is required to pay does not exceed the amount of coinsurance and deductible customarily required by other insurance policies which are subject to the provisions of this chapter for that type and level of service.

(b) Nothing in this section prevents health maintenance organizations from establishing durational limits which are actuarially equivalent to the benefits required by this section.

(c) Health maintenance organizations may limit the receipt of covered services by enrollees to services provided by or upon referral by providers associated with the health maintenance organization.

(d) The department shall make rules establishing objective and quantifiable criteria for determining when a health maintenance organization meets the conditions and requirements of this subsection.

(24) Nothing in this section shall prevent an insurer or health care service contractor other than a health maintenance organization, except as provided in subsection (23) of this section, from contracting with providers of health care services to furnish services to policy holders or certificate holders according to ORS 743.531 or 750.005, subject to the following conditions:

(a) An insurer or health care service contractor may establish limits for contracted services which are actuarially equivalent to the benefits required by this section, so long as the same range of treatment settings is made available.

(b) An insurer or health care service contractor, other than a health maintenance organization, may negotiate with contracting providers as to the cost of actuarially equivalent benefits, and such actuarially equivalent benefits for services of contracting providers shall be deemed to equal the minimum benefit levels specified in this section.

(c) An insurer or health care service contractor is not required to contract with all eligible providers, and payment for covered services of contracting providers may be in alternative methods or amounts rather than as specified in this section.

(d) Insurers and health care service contractors other than health maintenance organizations shall pay benefits toward the covered charges of noncontracting providers of services for the treatment of chemical dependency or mental or nervous conditions at the same level of deductible or coinsurance as would apply to covered charges of noncontracting providers of other health services under the same group policy or contract. The insured shall have the right to use the services of a noncontracting provider of services for the treatment of chemical dependency or mental or nervous conditions. Policies described in this subsection shall be subject to the provisions of subsection (1) of this section, whether or not the services for chemical dependency or mental or nervous conditions are provided by contracting or noncontracting providers.

(e) The department shall make rules establishing objective and quantifiable criteria for determining that a contract meets the conditions and requirements of this subsection and that actuarially equivalent services of contracting providers equal or exceed services obtainable with the minimum benefits specified in this section.

(25) The intent of the Legislative Assembly in adopting this section is to reserve benefits for different types of care to encourage cost effective care and to assure continuing access to levels of care most appropriate for the insured's condition and progress.

(26) The director, after notice and hearing, may adopt reasonable rules not inconsistent with this section that are considered necessary for the proper administration of these provisions.

SECTION 2. The amendments to ORS 743.556 by section 1 of this 1999 Act apply to policies of insurance issued or renewed on or after July 1, 2000.

SECTION 3. (1) There is created an Interim Task Force on Mental Health and Chemical Dependency Treatment consisting of seven members. The President of the Senate shall appoint four members from among members of the Senate, and the Speaker of the House of Representatives shall appoint three members from among the members of the House of Representatives. At least three members of the task force shall be members of the Emergency Board.

(2) The task force shall undertake a comprehensive review of mental health issues including the following:

(a) The extent to which the mental health needs of Oregonians are being met through the current systems for treating persons with mental health or chemical dependency treatment needs, including state, county or other providers of treatment services, and the status of mental health and chemical dependency coverage under the current insurance mandate;

(b) A determination of the population needing additional treatment that is not provided under the current statutory limits;

(c) The impact of raising benefit limits as those limits relate to improved accessibility, quality of care and treatment outcomes for the services provided;

(d) An evaluation of the cost to employers and employees of providing increased coverage for mental health and chemical dependency treatment in the group health insurance market, including an analysis of available actuarial data relating to the cost of increasing mandatory benefits in Oregon;

(e) A review of current statutes and the need for further modification regarding:

(A) The management of mental health services;

(B) The coverage of only medically necessary care; and

(C) The ability of insurers to exempt conditions not amenable to treatment and those treatments that are experimental;

(f) An examination of the integration of mental health services provided in the Oregon Health Plan into a managed care delivery system;

(g) An evaluation of the most effective roles for the public and private sector mental health delivery systems and the coordination of services between the two systems;

(h) The capacity of mental health care providers, including primary care physicians, to ensure sufficient access to treatment, especially in rural communities;

(i) A review of the issues associated with treatment of chronically mentally ill individuals;

(j) The costs associated with public sector mental health services and the extent to which current resources are appropriately utilized;

(k) A review of any areas of excess mental health or chemical dependency treatment utilization;

(L) The types of clinical guidelines and management of mental health services that provide the most cost-effective treatment, including the appropriate use of medications;

(m) An examination of whether chemical dependency, substance abuse and mental health should be similarly mandated by law; and

(n) An examination of any special issues associated with chemical dependency, substance abuse and mental health.

(3) Except as provided in this section, the task force created under authority of this section is subject to the provisions of ORS 171.605 to 171.635 and has the authority contained in ORS 171.505 to 171.530. Notwithstanding the provisions of ORS 171.206, the task force may file its written report at any time within 30 days after its final meeting, or at such later time as the appointing authorities may designate.

(4) A work plan consisting of a list of subjects for study by the task force and the duration of the study shall be developed by the Speaker of the House of Representatives and President of the Senate, in consultation with the task force chairperson. The work plan developed for the task force shall be filed with the Legislative Administrator.

(5) Task force work plans may be modified only by the Speaker of the House of Representatives and President of the Senate after consultation with the task force chairperson. The interim task force, by official action, may request such a modification.

(6) The task force shall use the services of permanent legislative staff to the greatest extent practicable. No other persons may be employed by the task force.

(7) Members of the Legislative Assembly shall be entitled to an allowance as authorized by ORS 171.072. Claims for expenses incurred in performing functions of the task force shall be paid out of funds appropriated for that purpose.

(8) All agencies, departments and officers of this state are directed to assist the task force in the performance of its functions, and to furnish such information and advice as the members of the task force consider necessary to perform their functions.

(9) Subject to the approval of the Emergency Board, the task force may accept contributions of funds and assistance from the United States Government, its agencies, or from any other source, public or private, and agree to conditions thereon not inconsistent with the purposes of the task force. All such funds are to aid in financing the functions of the task force and shall be deposited in the General Fund of the State Treasury to the credit of separate accounts for the task force and shall be disbursed for the purpose for which contributed in the same manner as funds appropriated for the task force.

(10) Official action by the task force shall require the approval of a majority of the members of the task force. All legislation recommended by official action of the task force must indicate that it is introduced at the request of the task force.

(11) The task force shall report to the Seventy-first Legislative Assembly on the effect of the increase to benefit limits made by the amendments to ORS 743.556 by section 1 of this 1999 Act. The report shall include information on whether the increased limits resulted in increased services or increased provider reimbursements. The report shall also include recommendations for legislative action.

Approved by the Governor September 1, 1999

Filed in the office of the Secretary of State September 2, 1999

Effective date October 23, 1999

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