California's 'Groundbreaking' Mental Health Law Faces Scrutiny

Three years ago, California leaders passed legislation that promised the most dramatic expansion of mental health and addiction care coverage in decades.

As the state’s residents struggled with the stress and trauma of a raging pandemic and a record wildfire season, mental health advocates used words like “groundbreaking” to describe the new law. Finally, they said, California was poised to become a national leader in mental health.

Their optimism about that law, Senate Bill 855, has been fraying ever since. Advocates say health plans routinely fail to ensure enough mental health providers accept their coverage, making patients wait too long before being seen.

Case in point: Last week, the Department of Managed Health Care unveiled news of a historic $200 million settlement with Kaiser Permanente for failing to provide patients with timely mental health appointments, among other issues.

Such issues will take center stage on Wednesday at a special oversight hearing of the Senate Select Committee on Mental Health and Addiction.

Democratic state Sen. Scott Wiener of San Francisco, chair of the committee and author of the California Mental Health Parity Act, says he shares many of the mental health advocates’ concerns.

 “We know the plans have a long history of finding ways not to cover mental health treatment,” he told CalMatters. “The whole purpose of this law is to put an end to that.”

Before the passage of the 2020 law, the state only required health plans to cover medically necessary treatment of nine serious mental illnesses. For years, mental health advocates have tried and failed to expand that list. With Wiener’s law, they were finally triumphant.

Beginning in January 2021, the state has required plans to pay for treatment of a much more extensive array of mental health issues, along with substance use disorder and addiction. This state law is separate from a federal mental health parity law passed in 2008. The concept of “parity” refers to requiring insurers to treat mental and physical health conditions equally.

Health plans say they “have been diligently working in good faith” to comply with these laws while facing industry-wide challenges like workforce shortages. They say they are navigating guidelines that are ambiguous and uneven while waiting for the Department of Managed Health Care to finalize regulations.

“This creates a situation of moving goalposts for plans, providers, and our enrollees,” said Mary Ellen Grant, spokesperson for the California Association of Health Plans, in an email.

Mental health parity investigations

Mental health advocates have also long criticized the Department of Managed Health Care, which oversees health plans in the state that receive monthly fees to provide health care for their members. And they, too, are concerned that it’s taking so long for the official rules to be decided.

This summer, more than a dozen advocacy groups signed a letter of concern to the department, questioning its commitment to enforcing some aspects of the new state parity law. The organizations want the department to publish and publicize its investigations.

“It’s still a relatively secret process,” said Lauren Finke, a policy director at The Kennedy Forum, a national organization that cosponsored California’s parity legislation.

The Department of Managed Health Care declined to make anyone available to speak with CalMatters until later this fall. In an email, a representative said the department “is committed to ensuring enrollees have appropriate access to behavioral health care when they need it.”

In response to advocates’ critiques that the department isn’t adequately analyzing and publicizing how well plans are complying with state parity law, the department said in a statement that it is evaluating health plans’ compliance in other ways; including that analysis in the behavioral health investigations would slow them down too much, the statement said.

 Meiram Bendat, a Santa Barbara attorney and psychotherapist who focuses on mental health parity, says that the three-year-old state law has improved patients’ ability to receive mental health care by creating a uniform definition of what is considered “medically necessary.”

But when it comes to ensuring that health plans maintain adequate provider networks, he said, the department is “failing miserably.” Too often, plans offer their members only outdated lists of providers who then prove to be unavailable, Bendat said. The Department of Managed Health Care hasn’t adequately held plans accountable for this and other problematic practices, he said.

“The historic network inadequacy around the state and the lack of meaningful fines, that’s a real failure on the part of the department,” he said.

Kaiser mental health settlement

Finke, of The Kennedy Forum, called the Kaiser settlement “long overdue” and “a very important first step in the Department holding plans more accountable for their performance [or lack thereof].” The settlement includes a $50 million fine and corrective action plan as well as a commitment by Kaiser to invest an additional $150 million over five years to improve behavioral health services.

But Finke and others also said the settlement itself provides evidence of the department’s failures to enforce a previous settlement agreement with Kaiser from 2017.

“Will DMHC do its job going forward? That’s the big question,” asked Fred Seavey, research director for the National Union of Healthcare Workers. The union represents 2,000 Kaiser mental health workers in Northern California who undertook a 10-week strike last year over heavy clinician workloads and long wait times for appointments.

He said he wrote complaints to the Department of Managed Health Care earlier this year, saying that Kaiser in Southern California has been illegally restricting the scope of behavioral health services.

Kaiser said, in an emailed statement, that “any accusation that we intentionally limit or restrict needed care is untrue.”

Southern California Kaiser members receive a wide range of behavioral health clinical offerings, the statement said. Despite a statewide shortage of clinicians, Kaiser is “doing all that we can” to expand its network of mental health providers.