By Eric Gelber
In this, the second edition of California Capitol Watch, we will look at two mental health/addiction laws enacted in the 2019-20 legislative session that took effect on January 1st of this year. SB 855 is, perhaps, the most significant bill passed last year addressing mental health and substance use disorders. It expands the requirements for coverage of mental health/addiction treatment by health plans and health insurance providers. SB 803 provides for the availability of funding for certified peer support specialists to address mental health and substance use disorders under the Medi-Cal program.
SB 855 (Wiener): Mental health or substance use disorders. In 1999, California passed AB 88 (Thompson), the California Mental Health Parity Act (MHPA), which requires a health plan contract or disability insurance policy to provide coverage for the diagnosis and medically necessary services of serious mental illnesses of a person of any age and of serious emotional disturbances of a child. Medical necessity was undefined, so health plans used their own internal criteria that are often inconsistent with nationally recognized standards of care. The MHPA only required health plans to cover all necessary treatment for a limited number of mental health (but no substance use) disorders. In 2008, Congress passed the Mental Health Parity and Addiction Parity Act requiring large group health plans to cover treatment for mental health and substance use disorders under the same terms and conditions as applied to other medical conditions. The Affordable Care Act (ACA) applied the federal Act to issuers in the individual market and qualified health plans offered through a health benefit exchange, including small group products. However, the ACA, likewise, does not define medical necessity. Thus, despite the ACA, needed mental health and addiction coverage could be denied through overly restrictive medical necessity determinations.
With the enactment of SB 855, updating the California MHPA, state law now requires all health plans and health insurance policies issued, amended, or renewed on or after January 1, 2021 to provide coverage for all medically necessary treatment of mental health and substance use disorders under the same terms and conditions applied to other medical conditions. 
This includes all mental health/substance abuse disorders described in the most recent version of the American Psychiatric Association’s Dianostic and Statistical Manual of Mental Disorders (DSM). Medically necessary treatment of a mental health or substance abuse disorder is defined, in part, as “a service or product addressing the specific needs of that patient, for the purpose of preventing, diagnosing or treating an illness, injury, condition, or its symptoms, including minimizing the progression of that illness, injury, condition, or its symptoms in a manner that is in accordance with the generally accepted standards of mental health and substance disorder care, [and] clinically appropriate in terms of type, frequency, extent, site and duration.”
SB 855 was enacted after years of failed attempts to improve access to mental health and substance use disorder services. The bill’s sponsors asserted that “[t]his landmark piece of legislation will help close a critical gap in the way mental health care is covered by insurers, one that often forces families to pay out of pocket for lifesaving care.” Opponents of the bill (e.g., health plans/insurance providers, the California Chamber of Commerce) argued that it would result in increased costs to employers and employees that are likely to be unmanageable given the current fiscal landscape. Proponents countered, noting, for example, that a California analysis shows that for every dollar spent on substance use treatment, society reaps approximately $7 in monetary benefits. Benefits are expected due to reduced costs associated with untreated mental health/substance use disorder treatment, including homelessness, criminal justice, and cost shifts onto Medi-Cal and other public programs. A neutral fiscal analysis by the California Health Benefits Review Program concluded that the bill would increase total net expenditures by only 0.002% for enrollees with regulated health plans and insurance policies. Opponents also argued that the bill would result in addicts flocking to California for ineffective recovery services and, additionally, that it does not address the goal of expanding mental health care as patients must want to access care and providers need to be available. Upon enactment of SB 855, Darrell Steinberg and Patrick J. Kennedy, on behalf of the bill’s sponsors, stated that “[t]his landmark piece of legislation will help close a critical gap in the way mental health care is covered by insurers, one that often forces families to pay out of pocket for lifesaving care” and should serve as a model for the nation.
SB 803 (Beall): Mental health services: peer support specialist certification. The Department of Health Care Services (DHCS) administers the state Medi-Cal program. SB 803 requires DHCS to include a certified peer support specialist as a provider type under Medi-Cal and to include peer support specialist services as a distinct service type in the Medi-Cal program. DHCS is also required to establish a certifying body and to establish curricula and core competencies required for certification. Peer support specialist is defined to mean a person who, among other things, is 18 years of age or older and who is a person who has self-identified as having lived experience with the process of recovery from mental illness, substance use disorder, or both, either as a consumer of these services or as the parent or family member of the consumer. By July 1, 2021, DHCS must also establish a code of ethics; determine continuing education requirements; and determine a process for investigation of complaints and corrective action. To become effective in a county under the new law, the county would have to opt into providing the benefit and provide the non-federal share (e.g., the funds used to draw down federal Medicaid matching funds).
The author of the bill stressed the impact the COVID-19 pandemic and subsequent economic downturn has had on the mental health of Californians as reasons why this bill is especially timely. He also noted that peer support is an evidence-based model that is a cost-effective practice proven to reduce hospitalization and homelessness and increase participation in treatment. Proponents (including many local governments, advocates, mental health and substance abuse service providers, and consumer organizations) argued that peer providers who use their life experience with mental illness, addiction and recovery, coupled with skills learned through formal training, have proven to be a valuable addition to service delivery in mental health settings. The bill received unanimous, bipartisan support in the Senate and the Assembly. The only noted opposition came from the California Right to Life Committee, which asserted, among other things, that the bill is an Orwellian model of the use of science, technology, and human compassion as a means to control all activities of the human person.
Eric Gelber, now retired, is a 1980 graduate of UC Davis School of Law (King Hall). He has nearly four decades of experience monitoring, analyzing, and crafting legislation through positions as a disability rights attorney, Chief Consultant with the Assembly Human Services Committee, and Legislative Director of the California Department of Developmental Services.
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