Steinberg Institute CEO testifies, urges legislature to hold health insurance companies accountable

October 18, 2023

Steinberg Institute CEO Karen Larsen testified before the Select Committee on Mental Health and Addiction Wednesday, urging lawmakers to hold health insurance companies accountable and demand more thorough state investigation into their compliance with landmark behavioral health bill, SB 855.

SB 855, authored by Senator Scott Wiener and sponsored by the Steinberg Institute in 2020, was a critical piece of legislation requiring commercial health insurers to cover “medically necessary treatment” of any recognized behavioral health condition or substance use disorder.

It also intended to stop insurers from forming their own internal criteria about what constituted “medically necessary treatment.” The legislation instead requires insurers to adopt uniform standards of care developed by nonprofit clinical specialty associations.

SB 855 went into effect in January of 2021, but there are widespread concerns about the lack of compliance from commercial insurers. The Steinberg Institute and The Kennedy Forum are working together to ensure proper implementation of the law.

“Passing SB 855 was only one piece of ensuring access to affordable and high-quality behavioral health services,” said Steinberg Institute CEO Karen Larsen at Wednesday’s hearing, “Strong enforcement is required to hold plans accountable for providing proper care.”

Some enforcement actions have been taken. State regulators at the Department of Managed Health Care (DMHC) levied a record fine against Kaiser Permanente last week, after an investigation found numerous violations, including failure to use the uniform standards of care stipulated by SB 855.

Still, compliance violations from many other commercial health insurers exist.

“We believe that these practices are not just reserved to Kaiser [Permanente], and are hurting Californians on other health plans,” Larsen said in her testimony.

Prior to the hearing, DMHC released internal reports on several other health plans with compliance violations, but the publicly released documentation was limited.

In her testimony, Larsen called for more transparency from DMHC regulators, urging them to release more complete analyses of health plan compliance that detailed not just SB 855 violations, but also evidence of insurers skirting requirements in the federal Mental Health Parity and Addiction Equity Act (MHPAEA).

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