Insights

Circular Letter on Health Coverage for Mental Health Conditions and Substance Use Disorder


On December 20, 2019, the Department of Financial Services (DFS) published Circular Letter No. 13 (2019). The new letter is meant to help carriers and employers better understand New York’s laws regarding coverage for mental health conditions and substance use disorder (SUD). On SUDs, first, NY law prohibits preauthorization and concurrent review during the first 28 days of inpatient admission for treatment of a SUD. New York law also contains a new prohibition against preauthorization and concurrent review during the first four weeks of outpatient treatment of a SUD. The law also prohibits carriers from performing concurrent utilization review during the first two weeks of continuous treatment (not to exceed 14 visits), provided certain conditions are met. In addition, every policy/contract that provides medical or similar comprehensive-type coverage that provides coverage for prescription drugs for the treatment of SUD must provide immediate access with no prior authorization. This requirement is not limited to an emergency supply of the prescription drug to treat a SUD, but rather applies to all formulary forms of prescribed medication that are covered under the policy/contract.

On mental health benefits, the circular letter states that New York law requires coverage of mental health benefits in accordance with the federal MHPAEA. Under MHPAEA, day and visit limits are prohibited, and the distinction between biologically based mental health conditions and all other mental health conditions is impermissible. It also includes the requirement that plans covering mental health conditions add language that provides that such coverage may not apply financial requirements or treatment limitations that are more restrictive than the predominant financial requirements and treatment limitations that apply to substantially all medical/surgical benefits covered by the policy/contract. The coverage must also be provided, at a minimum, consistently with MHPAEA.

In conclusion, the letter states that DFS intends to investigate carrier compliance with the requirements for coverage of mental health and SUD treatment described in the letter, and that it will take action against carriers for failure to adhere to any statutory or regulatory requirements for mental health and SUD treatment. Employers have no additional compliance obligations as a result of the letter; but should be aware of the letter to help field any employee questions regarding mental health or SUD coverage.

Circular Letter No. 13 (2019) »