Bill Text: IL HB5498 | 2019-2020 | 101st General Assembly | Introduced

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Bill Title: Amends the Illinois Insurance Code. Provides that the Department of Insurance and the Department of Healthcare and Family Services shall each appoint a Mental Health and Substance Use Disorder Parity Compliance Officer to assist with the responsibilities of enforcing the requirements of the Illinois Insurance Code. Provides that group accident and health policies providing coverage for hospital or medical treatment or services for illness on an expense-incurred basis shall provide specified coverage for the diagnosis and medically necessary treatment of mental, emotional, nervous, or substance use disorders or conditions. Provides criteria and standards for the types of treatment that constitute medically necessary treatment of mental, emotional, nervous, or substance use disorders or conditions. Provides that an insurer shall not limit benefits or coverage for chronic or pervasive mental, emotional, nervous, or substance use disorders or conditions to short-term treatment or to alleviating current symptoms. Provides that insurers shall perform specified actions to ensure the proper use of medical necessity criteria. Provides that if medically necessary services for mental, emotional, nervous, or substance use disorders or conditions are not available in-network within the geography and timeliness standards, the insurer must cover out-of-network services. Provides that if the Department of Insurance determines that an insurer has failed to meet the requirements of the amendatory Act, it shall impose a penalty per product line with respect to each beneficiary. Makes other changes.

Spectrum: Moderate Partisan Bill (Democrat 7-1)

Status: (Introduced - Dead) 2020-06-23 - Rule 19(b) / Re-referred to Rules Committee [HB5498 Detail]

Download: Illinois-2019-HB5498-Introduced.html

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101ST GENERAL ASSEMBLY State of Illinois 2019 and 2020 HB5498 Introduced , by Rep. Deb Conroy SYNOPSIS AS INTRODUCED:
215 ILCS 5/370c from Ch. 73, par. 982c
Amends the Illinois Insurance Code. Provides that the Department of Insurance and the Department of Healthcare and Family Services shall each appoint a Mental Health and Substance Use Disorder Parity Compliance Officer to assist with the responsibilities of enforcing the requirements of the Illinois Insurance Code. Provides that group accident and health policies providing coverage for hospital or medical treatment or services for illness on an expense-incurred basis shall provide specified coverage for the diagnosis and medically necessary treatment of mental, emotional, nervous, or substance use disorders or conditions. Provides criteria and standards for the types of treatment that constitute medically necessary treatment of mental, emotional, nervous, or substance use disorders or conditions. Provides that an insurer shall not limit benefits or coverage for chronic or pervasive mental, emotional, nervous, or substance use disorders or conditions to short-term treatment or to alleviating current symptoms. Provides that insurers shall perform specified actions to ensure the proper use of medical necessity criteria. Provides that if medically necessary services for mental, emotional, nervous, or substance use disorders or conditions are not available in-network within the geography and timeliness standards, the insurer must cover out-of-network services. Provides that if the Department of Insurance determines that an insurer has failed to meet the requirements of the amendatory Act, it shall impose a penalty per product line with respect to each beneficiary. Makes other changes.
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FISCAL NOTE ACT MAY APPLY STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT
A BILL FOR
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AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Reference to Act. This Act may be referred to as
the Ensuring Coverage of Mental Health and Substance Use
Disorder Care Act.
Section 2. Intent; purposes; findings.
(a) The General Assembly intends by this Act to ensure that
all health plan medical necessity determinations concerning
mental health and substance use disorder services are fully
consistent with the generally accepted standards of behavioral
healthcare.
(b) The U.S. District Court of the Northern District of
California in Wit v. United Behavioral Health, 2019 WL 1033730
(N.D.CA Mar. 5, 2019), a class-action case representing over
50,000 people wrongly and systematically denied coverage of
mental health and substance use disorder services they sought,
found that generally accepted standards of care require:
(1) effective treatment of underlying conditions,
rather than mere amelioration of current symptoms (such as
suicidality or psychosis);
(2) treatment of co-occurring behavioral health
disorders and medical conditions in a coordinated manner;

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(3) treatment of the least intensive and restrictive
level of care that is safe and effective; a lower level or
less intensive care is appropriate only if it is safe and
just as effective as treatment at a higher level of service
intensity;
(4) erring on the side of caution by placing patients
in higher levels of care when there is ambiguity as to the
appropriate level of care or when the recommended level of
care is not available;
(5) treatment to maintain functioning or prevent
deterioration;
(6) treatment of mental health and substance use
disorders for an appropriate duration based on individual
patient needs rather than on specific time limits;
(7) accounting for the unique needs of children and
adolescents when making level of care decisions; and
(8) applying multidimensional assessments of patient
needs when making determinations regarding the appropriate
level of care.
(c) In Wit v. United Behavioral Health, the U.S. District
Court concluded that all parties' experts agreed that the
following standardized assessment tools, used for medical
necessity determinations and placement decisions, reflect
generally accepted standards of care:
(1) the Treatment Criteria for Addictive,
Substance-Related, and Co-Occurring Conditions (ASAM

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Criteria) developed by the American Society of Addiction
Medicine;
(2) the Level of Care Utilization System (LOCUS)
criteria developed by the American Association of
Community Psychiatrists;
(3) the Child and Adolescent Level of Care Utilization
System (CALOCUS) developed by the American Association of
Community Psychiatrists;
(4) the Child and Adolescent Services Intensity
Instrument (CASII) developed by the American Academy of
Child & Adolescent Psychiatry; and
(5) the Early Childhood Service Intensity Instrument
(ECSII) developed by the American Academy Child &
Adolescent Psychiatry.
(d) Nothing in this Act is intended to be interpreted in
such a manner that it undermines patient self determination or
in a manner that limits a patient's right to choose his or her
preferred course of care or that is inconsistent with the
Medical Patient Rights Act.
Section 5. The Illinois Insurance Code is amended by
changing Section 370c as follows:
(215 ILCS 5/370c) (from Ch. 73, par. 982c)
Sec. 370c. Mental and emotional disorders.
(a)(1) On and after August 16, 2019 January 1, 2019 (the

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effective date of Public Act 101-386 this amendatory Act of the
101st General Assembly Public Act 100-1024), every insurer that
amends, delivers, issues, or renews group accident and health
policies providing coverage for hospital or medical treatment
or services for illness on an expense-incurred basis shall,
pursuant to subsections (h) through (m), provide coverage for
the diagnosis and medically necessary treatment of reasonable
and necessary treatment and services for mental, emotional,
nervous, or substance use disorders or conditions consistent
with the parity requirements of Section 370c.1 of this Code.
(2) Each insured that is covered for mental, emotional,
nervous, or substance use disorders or conditions shall be free
to select the physician licensed to practice medicine in all
its branches, licensed clinical psychologist, licensed
clinical social worker, licensed clinical professional
counselor, licensed marriage and family therapist, licensed
speech-language pathologist, or other licensed or certified
professional at a program licensed pursuant to the Substance
Use Disorder Act of his choice to treat such disorders, and the
insurer shall pay the covered charges of such physician
licensed to practice medicine in all its branches, licensed
clinical psychologist, licensed clinical social worker,
licensed clinical professional counselor, licensed marriage
and family therapist, licensed speech-language pathologist, or
other licensed or certified professional at a program licensed
pursuant to the Substance Use Disorder Act up to the limits of

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coverage, provided (i) the disorder or condition treated is
covered by the policy, and (ii) the physician, licensed
psychologist, licensed clinical social worker, licensed
clinical professional counselor, licensed marriage and family
therapist, licensed speech-language pathologist, or other
licensed or certified professional at a program licensed
pursuant to the Substance Use Disorder Act is authorized to
provide said services under the statutes of this State and in
accordance with accepted principles of his profession.
(3) Insofar as this Section applies solely to licensed
clinical social workers, licensed clinical professional
counselors, licensed marriage and family therapists, licensed
speech-language pathologists, and other licensed or certified
professionals at programs licensed pursuant to the Substance
Use Disorder Act, those persons who may provide services to
individuals shall do so after the licensed clinical social
worker, licensed clinical professional counselor, licensed
marriage and family therapist, licensed speech-language
pathologist, or other licensed or certified professional at a
program licensed pursuant to the Substance Use Disorder Act has
informed the patient of the desirability of the patient
conferring with the patient's primary care physician.
(4) "Mental, emotional, nervous, or substance use disorder
or condition" means a condition or disorder that involves a
mental health condition or substance use disorder that falls
under any of the diagnostic categories listed in the mental and

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behavioral disorders chapter of the current edition of the
International Classification of Disease or that is listed in
the most recent version of the Diagnostic and Statistical
Manual of Mental Disorders. "Mental, emotional, nervous, or
substance use disorder or condition" includes any mental health
condition that occurs during pregnancy or during the postpartum
period and includes, but is not limited to, postpartum
depression.
(b)(1) (Blank).
(2) (Blank).
(2.5) (Blank).
(3) Unless otherwise prohibited by federal law and
consistent with the parity requirements of Section 370c.1 of
this Code, the reimbursing insurer that amends, delivers,
issues, or renews a group or individual policy of accident and
health insurance, a qualified health plan offered through the
health insurance marketplace, or a provider of treatment of
mental, emotional, nervous, or substance use disorders or
conditions shall furnish medical records or other necessary
data that substantiate that initial or continued treatment is
at all times medically necessary. An insurer shall provide a
mechanism for the timely review by a provider holding the same
license and practicing in the same specialty as the patient's
provider, who is unaffiliated with the insurer, jointly
selected by the patient (or the patient's next of kin or legal
representative if the patient is unable to act for himself or

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herself), the patient's provider, and the insurer in the event
of a dispute between the insurer and patient's provider
regarding the medical necessity, made pursuant to subsections
(h) through (m), of a treatment proposed by a patient's
provider. If the reviewing provider determines the treatment to
be medically necessary, the insurer shall provide
reimbursement for the treatment. Future contractual or
employment actions by the insurer regarding the patient's
provider may not be based on the provider's participation in
this procedure. Nothing prevents the insured from agreeing in
writing to continue treatment at his or her expense. When
making a determination of the medical necessity pursuant to
subsections (h) through (m) for a treatment modality for
mental, emotional, nervous, or substance use disorders or
conditions, an insurer must make the determination in a manner
that is consistent with the manner used to make that
determination with respect to other diseases or illnesses
covered under the policy, including an appeals process. Medical
necessity determinations made pursuant to subsections (h)
through (m) for substance use disorders shall be made in
accordance with appropriate patient placement criteria
established by the American Society of Addiction Medicine. No
additional criteria may be used to make medical necessity
determinations, pursuant to subsections (h) through (m), for
substance use disorders.
(4) A group health benefit plan amended, delivered, issued,

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or renewed on or after January 1, 2019 (the effective date of
Public Act 100-1024) or an individual policy of accident and
health insurance or a qualified health plan offered through the
health insurance marketplace amended, delivered, issued, or
renewed on or after January 1, 2019 (the effective date of
Public Act 100-1024):
(A) shall provide coverage based upon medical
necessity, pursuant to subsections (h) through (m), for the
treatment of a mental, emotional, nervous, or substance use
disorder or condition consistent with the parity
requirements of Section 370c.1 of this Code; provided,
however, that in each calendar year coverage shall not be
less than the following:
(i) 45 days of inpatient treatment; and
(ii) beginning on June 26, 2006 (the effective date
of Public Act 94-921), 60 visits for outpatient
treatment including group and individual outpatient
treatment; and
(iii) for plans or policies delivered, issued for
delivery, renewed, or modified after January 1, 2007
(the effective date of Public Act 94-906), 20
additional outpatient visits for speech therapy for
treatment of pervasive developmental disorders that
will be in addition to speech therapy provided pursuant
to item (ii) of this subparagraph (A); and
(B) may not include a lifetime limit on the number of

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days of inpatient treatment or the number of outpatient
visits covered under the plan.
(C) (Blank).
(5) An issuer of a group health benefit plan or an
individual policy of accident and health insurance or a
qualified health plan offered through the health insurance
marketplace may not count toward the number of outpatient
visits required to be covered under this Section an outpatient
visit for the purpose of medication management and shall cover
the outpatient visits under the same terms and conditions as it
covers outpatient visits for the treatment of physical illness.
(5.5) An individual or group health benefit plan amended,
delivered, issued, or renewed on or after September 9, 2015
(the effective date of Public Act 99-480) shall offer coverage
for medically necessary acute treatment services and medically
necessary clinical stabilization services. The treating
provider shall base all treatment recommendations and the
health benefit plan shall base all medical necessity
determinations, pursuant to subsections (h) through (m), for
substance use disorders in accordance with the most current
edition of the Treatment Criteria for Addictive,
Substance-Related, and Co-Occurring Conditions established by
the American Society of Addiction Medicine. The treating
provider shall base all treatment recommendations and the
health benefit plan shall base all medical necessity
determinations, pursuant to subsections (h) through (m), for

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medication-assisted treatment in accordance with the most
current Treatment Criteria for Addictive, Substance-Related,
and Co-Occurring Conditions established by the American
Society of Addiction Medicine.
As used in this subsection:
"Acute treatment services" means 24-hour medically
supervised addiction treatment that provides evaluation and
withdrawal management and may include biopsychosocial
assessment, individual and group counseling, psychoeducational
groups, and discharge planning.
"Clinical stabilization services" means 24-hour treatment,
usually following acute treatment services for substance
abuse, which may include intensive education and counseling
regarding the nature of addiction and its consequences, relapse
prevention, outreach to families and significant others, and
aftercare planning for individuals beginning to engage in
recovery from addiction.
(6) An issuer of a group health benefit plan may provide or
offer coverage required under this Section through a managed
care plan.
(6.5) An individual or group health benefit plan amended,
delivered, issued, or renewed on or after January 1, 2019 (the
effective date of Public Act 100-1024):
(A) shall not impose prior authorization requirements,
other than those established under the Treatment Criteria
for Addictive, Substance-Related, and Co-Occurring

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Conditions established by the American Society of
Addiction Medicine, on a prescription medication approved
by the United States Food and Drug Administration that is
prescribed or administered for the treatment of substance
use disorders;
(B) shall not impose any step therapy requirements,
other than those established under the Treatment Criteria
for Addictive, Substance-Related, and Co-Occurring
Conditions established by the American Society of
Addiction Medicine, before authorizing coverage for a
prescription medication approved by the United States Food
and Drug Administration that is prescribed or administered
for the treatment of substance use disorders;
(C) shall place all prescription medications approved
by the United States Food and Drug Administration
prescribed or administered for the treatment of substance
use disorders on, for brand medications, the lowest tier of
the drug formulary developed and maintained by the
individual or group health benefit plan that covers brand
medications and, for generic medications, the lowest tier
of the drug formulary developed and maintained by the
individual or group health benefit plan that covers generic
medications; and
(D) shall not exclude coverage for a prescription
medication approved by the United States Food and Drug
Administration for the treatment of substance use

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disorders and any associated counseling or wraparound
services on the grounds that such medications and services
were court ordered.
(7) (Blank).
(8) (Blank).
(9) With respect to all mental, emotional, nervous, or
substance use disorders or conditions, coverage for inpatient
treatment shall include coverage for treatment in a residential
treatment center certified or licensed by the Department of
Public Health or the Department of Human Services.
(c) This Section shall not be interpreted to require
coverage for speech therapy or other habilitative services for
those individuals covered under Section 356z.15 of this Code.
(d) With respect to a group or individual policy of
accident and health insurance or a qualified health plan
offered through the health insurance marketplace, the
Department and, with respect to medical assistance, the
Department of Healthcare and Family Services shall each enforce
the requirements of this Section and Sections 356z.23 and
370c.1 of this Code, the Paul Wellstone and Pete Domenici
Mental Health Parity and Addiction Equity Act of 2008, 42
U.S.C. 18031(j), and any amendments to, and federal guidance or
regulations issued under, those Acts, including, but not
limited to, final regulations issued under the Paul Wellstone
and Pete Domenici Mental Health Parity and Addiction Equity Act
of 2008 and final regulations applying the Paul Wellstone and

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Pete Domenici Mental Health Parity and Addiction Equity Act of
2008 to Medicaid managed care organizations, the Children's
Health Insurance Program, and alternative benefit plans.
Specifically, the Department and the Department of Healthcare
and Family Services shall take action:
(1) proactively ensuring compliance by individual and
group policies, including by requiring that insurers
submit comparative analyses, as set forth in paragraph (6)
of subsection (k) of Section 370c.1, demonstrating how they
design and apply nonquantitative treatment limitations,
both as written and in operation, for mental, emotional,
nervous, or substance use disorder or condition benefits as
compared to how they design and apply nonquantitative
treatment limitations, as written and in operation, for
medical and surgical benefits;
(2) evaluating all consumer or provider complaints
regarding mental, emotional, nervous, or substance use
disorder or condition coverage for possible parity
violations;
(3) performing parity compliance market conduct
examinations or, in the case of the Department of
Healthcare and Family Services, parity compliance audits
of individual and group plans and policies, including, but
not limited to, reviews of:
(A) nonquantitative treatment limitations,
including, but not limited to, prior authorization

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requirements, concurrent review, retrospective review,
step therapy, network admission standards,
reimbursement rates, and geographic restrictions;
(B) denials of authorization, payment, and
coverage; and
(C) other specific criteria as may be determined by
the Department.
The findings and the conclusions of the parity compliance
market conduct examinations and audits shall be made public.
The Director may adopt rules to effectuate any provisions
of the Paul Wellstone and Pete Domenici Mental Health Parity
and Addiction Equity Act of 2008 that relate to the business of
insurance.
(d-1) The Department of Insurance and the Department of
Healthcare and Family Services shall each appoint a Mental
Health and Substance Use Disorder Parity Compliance Officer to
assist the departments with the responsibilities of enforcing
the requirements of this Section and Section 370c.1.
(e) Availability of plan information.
(1) The criteria for medical necessity determinations,
pursuant to subsections (h) through (m), made under a group
health plan, an individual policy of accident and health
insurance, or a qualified health plan offered through the
health insurance marketplace with respect to mental health
or substance use disorder benefits (or health insurance
coverage offered in connection with the plan with respect

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to such benefits) must be made available by the plan
administrator (or the health insurance issuer offering
such coverage) to any current or potential participant,
beneficiary, or contracting provider upon request.
(2) The reason for any denial under a group health
benefit plan, an individual policy of accident and health
insurance, or a qualified health plan offered through the
health insurance marketplace (or health insurance coverage
offered in connection with such plan or policy) of
reimbursement or payment for services with respect to
mental, emotional, nervous, or substance use disorders or
conditions benefits in the case of any participant or
beneficiary must be made available within a reasonable time
and in a reasonable manner and in readily understandable
language by the plan administrator (or the health insurance
issuer offering such coverage) to the participant or
beneficiary upon request.
(f) As used in this Section, "group policy of accident and
health insurance" and "group health benefit plan" includes (1)
State-regulated employer-sponsored group health insurance
plans written in Illinois or which purport to provide coverage
for a resident of this State; and (2) State employee health
plans.
(g) (1) As used in this subsection:
"Benefits", with respect to insurers, means the benefits
provided for treatment services for inpatient and outpatient

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treatment of substance use disorders or conditions at American
Society of Addiction Medicine levels of treatment 2.1
(Intensive Outpatient), 2.5 (Partial Hospitalization), 3.1
(Clinically Managed Low-Intensity Residential), 3.3
(Clinically Managed Population-Specific High-Intensity
Residential), 3.5 (Clinically Managed High-Intensity
Residential), and 3.7 (Medically Monitored Intensive
Inpatient) and OMT (Opioid Maintenance Therapy) services.
"Benefits", with respect to managed care organizations,
means the benefits provided for treatment services for
inpatient and outpatient treatment of substance use disorders
or conditions at American Society of Addiction Medicine levels
of treatment 2.1 (Intensive Outpatient), 2.5 (Partial
Hospitalization), 3.5 (Clinically Managed High-Intensity
Residential), and 3.7 (Medically Monitored Intensive
Inpatient) and OMT (Opioid Maintenance Therapy) services.
"Substance use disorder treatment provider or facility"
means a licensed physician, licensed psychologist, licensed
psychiatrist, licensed advanced practice registered nurse, or
licensed, certified, or otherwise State-approved facility or
provider of substance use disorder treatment.
(2) A group health insurance policy, an individual health
benefit plan, or qualified health plan that is offered through
the health insurance marketplace, small employer group health
plan, and large employer group health plan that is amended,
delivered, issued, executed, or renewed in this State, or

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approved for issuance or renewal in this State, on or after
January 1, 2019 (the effective date of Public Act 100-1023)
shall comply with the requirements of this Section and Section
370c.1. The services for the treatment and the ongoing
assessment of the patient's progress in treatment shall follow
the requirements of 77 Ill. Adm. Code 2060.
(3) Prior authorization shall not be utilized for the
benefits under this subsection. The substance use disorder
treatment provider or facility shall notify the insurer of the
initiation of treatment. For an insurer that is not a managed
care organization, the substance use disorder treatment
provider or facility notification shall occur for the
initiation of treatment of the covered person within 2 business
days. For managed care organizations, the substance use
disorder treatment provider or facility notification shall
occur in accordance with the protocol set forth in the provider
agreement for initiation of treatment within 24 hours. If the
managed care organization is not capable of accepting the
notification in accordance with the contractual protocol
during the 24-hour period following admission, the substance
use disorder treatment provider or facility shall have one
additional business day to provide the notification to the
appropriate managed care organization. Treatment plans shall
be developed in accordance with the requirements and timeframes
established in 77 Ill. Adm. Code 2060. If the substance use
disorder treatment provider or facility fails to notify the

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insurer of the initiation of treatment in accordance with these
provisions, the insurer may follow its normal prior
authorization processes.
(4) For an insurer that is not a managed care organization,
if an insurer determines that benefits are no longer medically
necessary, the insurer shall notify the covered person, the
covered person's authorized representative, if any, and the
covered person's health care provider in writing of the covered
person's right to request an external review pursuant to the
Health Carrier External Review Act. The notification shall
occur within 24 hours following the adverse determination.
Pursuant to the requirements of the Health Carrier External
Review Act, the covered person or the covered person's
authorized representative may request an expedited external
review. An expedited external review may not occur if the
substance use disorder treatment provider or facility
determines that continued treatment is no longer medically
necessary. Under this subsection, a request for expedited
external review must be initiated within 24 hours following the
adverse determination notification by the insurer. Failure to
request an expedited external review within 24 hours shall
preclude a covered person or a covered person's authorized
representative from requesting an expedited external review.
If an expedited external review request meets the criteria
of the Health Carrier External Review Act, an independent
review organization shall make a final determination of medical

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necessity, pursuant to subsections (h) through (m), within 72
hours. If an independent review organization upholds an adverse
determination, an insurer shall remain responsible to provide
coverage of benefits through the day following the
determination of the independent review organization. A
decision to reverse an adverse determination shall comply with
the Health Carrier External Review Act.
(5) The substance use disorder treatment provider or
facility shall provide the insurer with 7 business days'
advance notice of the planned discharge of the patient from the
substance use disorder treatment provider or facility and
notice on the day that the patient is discharged from the
substance use disorder treatment provider or facility.
(6) The benefits required by this subsection shall be
provided to all covered persons with a diagnosis of substance
use disorder or conditions. The presence of additional related
or unrelated diagnoses shall not be a basis to reduce or deny
the benefits required by this subsection.
(7) Nothing in this subsection shall be construed to
require an insurer to provide coverage for any of the benefits
in this subsection.
(h)(1) Every insurer that amends, delivers, issues, or
renews group accident and health policies providing coverage
for hospital or medical treatment or services for illness on an
expense-incurred basis on or after July 1, 2020 shall, pursuant
to this Section, provide coverage for the diagnosis and

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medically necessary treatment of mental, emotional, nervous,
or substance use disorders or conditions.
(2) Medically necessary treatment of mental, emotional,
nervous, or substance use disorders or conditions shall be an
item or service that is:
(A) recommended by the patient's treatment provider;
(B) furnished in the manner and setting that can most
effectively and comprehensively address patients'
conditions, including, but not limited to, functional
impairments, lack of coping skills, symptoms, and the
underlying bio-psycho-social determinants of mental
health, substance use, medical disorders, and any
combination thereof;
(C) provided in sufficient amount, duration, and scope
to:
(i) prevent, diagnose, or treat a disorder;
(ii) achieve age-appropriate growth and
development;
(iii) manage the progression of disability; or
(iv) attain, maintain, or regain full functional
capacity.
(D) consistent with generally accepted standards of
practice, which shall be based on:
(i) scientific evidence published in peer-reviewed
medical or scientific literature generally recognized
by the relevant clinical community; or

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(ii) clinical specialty society recommendations,
professional standards, or consensus statements.
(3) An insurer shall not limit benefits or coverage for
chronic or pervasive mental, emotional, nervous, or substance
use disorders or conditions to short-term treatment or to
alleviating current symptoms.
(4) Consistent with paragraph (2), for all medical
necessity determinations concerning level of care placement,
continued stay, and transfer and discharge, to the extent
applicable services are described therein, an insurer must
exclusively rely on the most recent editions of:
(A) the Treatment Criteria for Addictive,
Substance-Related, and Co-Occurring Conditions (ASAM
Criteria) developed by the American Society of Addiction
Medicine for substance use disorders for patients of any
age;
(B) the Level of Care Utilization System (LOCUS)
criteria developed by the American Association of
Community Psychiatrists for mental health disorders for
patients ages 18 years and over;
(C) the Child and Adolescent Level of Care Utilization
System (CALOCUS) developed by the American Association of
Community Psychiatrists or the Child and Adolescent
Services Intensity Instrument (CASII) developed by the
American Academy of Child & Adolescent Psychiatry for
mental health disorders for patients ages 6 to 17;

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(D) the Early Childhood Service Intensity Instrument
(ECSII) developed by the American Academy Child &
Adolescent Psychiatry for mental health disorders for
patients ages 0 to 5 years; or
(E) the American Psychiatric Association criteria for
eating disorders for a primary diagnosis of an eating
disorder for patients of any age.
(5) To ensure the proper use of criteria described in
paragraph (4), insurers shall:
(A) track, identify, and analyze how the clinical
guidelines are used to certify care, deny care, and support
the appeals process and submit the results of this analysis
to the Department or, in the case of Medicaid managed care
organizations, to the Department of Healthcare and Family
Services on July 1 of every year. The Departments are to
submit a joint report summarizing the submitted analyses to
the General Assembly by January 1 of every year;
(B) apply the criteria to the level of treatment
proposed by the insured patient's treatment provider and
not impose criteria for a different or higher level of
treatment;
(C) run inter-rater reliability reports about how the
clinical guidelines are used in conjunction with the
utilization management process and parity compliance
activities;
(D) achieve inter-rater reliability pass rates of at

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least 90% and, whenever this threshold is not met,
immediately provide for the remediation of poor
inter-rater reliability and inter-reliability testing for
all new staff before they can conduct utilization review
without supervision; and
(E) report the activities in this subsection to the
plan's quality assurance committee.
(i) Every insurer that amends, delivers, issues, or renews
group accident and health policies providing coverage for
hospital or medical treatment or services for illness on an
expense-incurred basis shall, at minimum, include the
following services as covered benefits for mental, emotional,
nervous, or substance use disorders or conditions:
(1) outpatient services;
(2) inpatient services;
(3) intermediate services, including the full range of
levels of care in the most recent edition of the ASAM
criteria, LOCUS, CALOCUS, ECSII, and CASII (including, but
not limited to, partial hospitalization, intensive
outpatient, psycho-social treatment models, and
coordinated specialty care);
(4) emergency and urgent care services, both inpatient
and outpatient;
(5) all medications approved by the United States Food
and Drug Administration for the treatment of substance use
disorders; and

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(6) emergency medication without prior authorization.
(j) If any medically necessary services for mental,
emotional, nervous, or substance use disorders or conditions
are not available in-network within the geography and
timeliness standards set by law or regulation, the insurer must
immediately cover out-of-network services, whether secured by
the patient or insurer, at an in-network benefit level and
reimburse out-of-network providers for such services at full
billed charges. An insurer may not interrupt a course of
treatment initiated out-of-network due to inadequacy if
in-network services subsequently become available.
(k) An insurer shall not limit the benefits or coverage for
medically necessary services on the basis that those services
should be or could be covered by a public entitlement program,
including, but not limited to, special education or an
individualized education program, Medicaid, Medicare,
Supplemental Security Income, or Social Security Disability
Insurance, and shall not include or enforce a contract term
that excludes otherwise covered benefits on the basis that
those services should be or could be covered by a public
entitlement program.
(l) An insurer shall only engage applicable qualified
physicians who specialize in the treatment of mental,
emotional, nervous, or substance use disorders or conditions or
the appropriate subspecialty therein and who possess an active
professional license or certificate, to review, approve, or

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deny services.
(m) An insurer shall not adopt, impose, or enforce any
terms in its policies or provider agreements, in writing or in
operation, that undermine or alter the requirements in this
Section.
(n) If the Department determines that an insurer has failed
to meet any requirement of this Section or Section 370c.1, the
Department shall impose a penalty per product line with respect
to each participant or beneficiary to whom such failure
relates.
(1) The amount of the penalty imposed shall be as
follows:
(A) for violations in which it is established that
the insurer did not know and, by exercising reasonable
diligence, would not have known that the insurer
violated a provision, an amount not less than $100 or
more than $50,000 for each violation;
(B) for a violation in which it is established that
the violation was due to reasonable cause and not to
willful neglect, an amount not less than $1,000 or more
than $50,000 for each violation;
(C) for a violation in which it is established that
the violation was due to willful neglect and was timely
corrected, an amount not less than $10,000 or more than
$50,000 for each violation; and
(D) for a violation in which it is established that

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the violation was due to willful neglect and was not
timely corrected, an amount not less than $50,000 for
each violation.
(2) Except that a penalty for violations of the same
requirement or prohibition under any of these categories
may not exceed $3,000,000 in a calendar year.
(3) With respect to parity, violations of different
State or federal requirements or prohibitions shall be
considered a unique violation for the purposes of paragraph
(2).
(4) The amounts in this subsection shall be annually
adjusted for inflation in accordance with 26 U.S.C.
1(f)(3).
(5) Notwithstanding paragraph (3) of Section 403A,
penalties under this Section and Section 370c.1 shall not
be subject to time limits.
(Source: P.A. 100-305, eff. 8-24-17; 100-1023, eff. 1-1-19;
100-1024, eff. 1-1-19; 101-81, eff. 7-12-19; 101-386, eff.
8-16-19; revised 9-20-19.)