Coverage for Treatment of Substance Use Disorders

On May 8, 2017, the New Jersey (NJ) Department of Insurance published Bulletin No. 17-05. The bulletin relates to a recently enacted NJ law (Chapter 28), which requires carriers to administer benefits for the treatment of substance use disorder in a specific way and relies on the American Psychiatric Association’s definition of “substance use disorder” (including substance use withdrawal). Substance abuse disorder can be applied to the following classes of drugs: alcohol, cannabis, hallucinogens (including phencyclidine), inhalants, opioids, sedatives, hypnotics, anxiolytics, stimulants and tobacco. Under the new law, carriers are required to provide unlimited inpatient and outpatient benefits for the treatment of substance use disorder at network facilities (meaning with network providers). Except for the case of an in-plan exception, a person covered under a PPO or POS plan who voluntarily uses on out-of-network provider will not be entitled to the protections of the new law with respect to those out-of-network services. Carriers must provide benefits for the first 180 days per plan year of inpatient and outpatient treatment of substance use disorder without prior authorization or other prospective utilization management requirements when determined medically necessary by the person’s physician, psychologist or psychiatrist. Carriers are also required to provide benefits for the first 28 days of an inpatient stay during each plan year without retrospective or concurrent review (where deemed medically necessary). The bulletin contains examples to help explain how that might work across two different plan years.

The bulletin also contains more detail on what constitutes “medical necessity,” and concurrent review with respect to inpatient care. It also outlines that in the case of an emergency admission to an out-of-network hospital, the covered person must comply with the emergency admission requirements stated in their plan.

On prescription drugs, the bulletin (and the new NJ law) describes coverage for prescription drugs as they relate to substance use disorder. Specifically, benefits for outpatient prescription drugs for the first 180 days may not be subject to any prior authorization or prospective utilization management. In addition, the cost-sharing for covered prescription drugs is generally the applicable cost-sharing required by the covered person’s plan. There are specific rules when it comes to opioid drugs, where cost-sharing for the initial maximum five-day supply may be determined in two ways. The first method allows cost-sharing proportional to the amount prescribed, whereas the second method allows the cost-sharing for the full 30-day supply to be charged but prohibits cost-sharing if/when the balance of the same drug is prescribed. The bulletin contains three examples on how that might play out.

Finally, the bulletin contains a helpful summary chart (on page 10) that outlines the various changes under the new NJ law. The bulletin applies to plans issued or renewed on or after May 16, 2017. Employers don’t have to make any compliance changes in connection with the bulletin, but should be aware of the bulletin as a resource for employees with substance use disorder treatment questions.

Bulletin No. 17-05 »