GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1997

H	1 

HOUSE BILL 563*

Short Title:  Mental Health Parity.	(Public)

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Sponsors: Representatives Alexander; Adams, Beall, Black, Bonner, Boyd-McIntyre, Church, Crawford, Cunningham, Dedmon, Dickson, Earle, Easterling, Fox, Gamble, Goodwin, Hackney, H. Hunter, R. Hunter, Hurley, Insko, Jeffus, Luebke, Michaux, Miller, Mosley, Oldham, Smith, Wainwright, Watson, Wilkins, G. Wilson, Wright, and Yongue.

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Referred to:  Insurance.

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March 20, 1997

A BILL TO BE ENTITLED
AN ACT TO REQUIRE PARITY IN HEALTH INSURANCE FOR MENTAL ILLNESS AND CHEMICAL DEPENDENCY.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 58-50-155 is amended by adding the following new subsection to read:
"( a2)	Notwithstanding G.S. 58-50-125(c), the standard health plan developed and approved under G.S. 58-50-125 shall provide coverage for the treatment of chemical dependency and mental illness that is at least equal to the coverage required by G.S. 58-51-50 and G.S. 58-51-55, respectively."
Section 2. G.S. 58-51-50 reads as rewritten:
"§ 58-51-50.  Coverage for chemical dependency treatment.
(a)	As used in this section, the term ‘chemical dependency' means the pathological use or abuse of alcohol or other drugs in a manner or to a degree that produces an impairment in personal, social or occupational functioning and which may, but need not, include a pattern of tolerance and withdrawal.
(b)	Every insurer that writes a policy or contract of group or blanket health insurance or group or blanket accident and health insurance that is issued, renewed, or amended on or after January 1, 1985, shall provide to its insureds benefits for the necessary care and treatment of chemical dependency that are not less favorable than benefits for physical illness generally. Benefits for treatment of chemical dependency shall be subject to the same durational limits, dollar limits, deductibles, and coinsurance factors as are benefits for physical illness generally.
			(d)	Provisions for benefits for necessary care and treatment of chemical dependency in group policies or group contracts of insurance shall provide benefit payments for the following providers of necessary care and treatment of chemical dependency:
(1)	The following units of a general hospital licensed under Article 5 of General Statutes Chapter 131E:
a.	Chemical dependency units in facilities licensed after October 1, 1984;
b.	Medical units;
c.	Psychiatric units; and
(2)	The following facilities or programs licensed after July 1, 1984, under Article 2 of General Statutes Chapter 122C:
a.	Chemical dependency units in psychiatric hospitals;
b.	Chemical dependency hospitals;
c.	Residential chemical dependency treatment facilities;
d.	Social setting detoxification facilities or programs;
e.	Medical detoxification or programs; and
(3)	Duly licensed physicians and duly licensed practicing psychologists and certified professionals working under the direct supervision of such physicians or psychologists in facilities described in (1) and (2) above and in day/night programs or outpatient treatment facilities licensed after July 1, 1984, under Article 2 of General Statutes Chapter 122C.
Provided, however, that nothing in this subsection shall prohibit any policy or contract of insurance from requiring the most cost effective treatment setting to be utilized by the person undergoing necessary care and treatment for chemical dependency.
	."
Section 3.  G.S. 58-51-55 reads as rewritten:
"§ 58-51-55.  No discrimination against the mentally ill and chemically dependent.
(a)	As used in this section, the term:
(1)	'Mental illness' has the same meaning as defined in G.S. 122C-3(21); and
(2)	'Chemical dependency' has the same meaning as defined in G.S. 58-51-50
with a diagnosis found in the Diagnostic and Statistical Manual of Mental Disorders DSM-IV or the International Classification of Diseases ICD/9/CM, or a later edition of those manuals.
(b)	No insurance company licensed in this State under this Chapter shall, solely because an individual to be insured has or had a mental illness or chemical dependency:
(1)	Refuse to issue or deliver to that individual any policy that affords benefits or coverages for any medical treatment or service for physical illness or injury;
(2)	Have a higher premium rate or charge for physical illness or injury coverages or benefits for that individual; or
(3)	Reduce physical illness or injury coverages or benefits for that individual.
		(e)	Every insurer that writes a policy or contract of group or blanket health insurance or group or blanket accident and health insurance that is issued, renewed, or amended on or after January 1, 1998, shall provide to its insureds benefits for the necessary care and treatment of mental illness that are not less favorable than benefits for physical illness generally.  Benefits for treatment of mental illness shall be subject to the same durational limits, dollar limits, deductibles, and coinsurance factors as are benefits for physical illness generally."
Section 4. G.S. 58-65-75 reads as rewritten:
"§ 58-65-75.  Coverage for chemical dependency treatment.
(a)	As used in this section, the term 'chemical dependency' means the pathological use or abuse of alcohol or other drugs in a manner or to a degree that produces an impairment in personal, social, or occupational functioning and which may, but need not, include a pattern of tolerance and withdrawal.
(b)	Every group insurance certificate or group subscriber contract under any hospital or medical plan governed by this Article and Article 66 of this Chapter that is issued, renewed, or amended on or after January 1, 1985, shall provide to its insureds benefits for the necessary care and treatment of chemical dependency that are not less favorable than benefits for physical illness generally. Benefits for chemical dependency shall be subject to the same durational limits, dollar limits, deductibles, and coinsurance factors as are benefits for physical illness generally.
			(d)	Provisions for benefits for necessary care and treatment of chemical dependency in group certificates or group contracts shall provide for benefit payments for the following providers of necessary care and treatment of chemical dependency:
(1)	The following units of a general hospital licensed under Article 5 of General Statutes Chapter 131E:
a.	Chemical dependency units in facilities licensed after October 1, 1984;
b.	Medical units;
c.	Psychiatric units; and
(2)	The following facilities or programs licensed after July 1, 1984, under Article 2 of General Statutes Chapter 122C:
a.	Chemical dependency units in psychiatric hospitals;
b.	Chemical dependency hospitals;
c.	Residential chemical dependency treatment facilities;
d.	Social setting detoxification facilities or programs;
e.	Medical detoxification facilities or programs; and
(3)	Duly licensed physicians and duly licensed psychologists and certified professionals working under the direct supervision of such physicians or psychologists in facilities described in (1) and (2) above and in day/night programs or outpatient treatment facilities licensed after July 1, 1984, under Article 2 of General Statutes Chapter 122C.  After January 1, 1995, ‘duly licensed psychologists' shall be defined as licensed psychologists who hold permanent licensure and certification as health services provider psychologist issued by the North Carolina Psychology Board.
Provided, however, that nothing in this subsection shall prohibit any certificate or contract from requiring the most cost effective treatment setting to be utilized by the person undergoing necessary care and treatment for chemical dependency.
	."
Section 5. G.S. 58-65-90 reads as rewritten:
"§ 58-65-90.  No discrimination against the mentally ill and chemically dependent.
(a)	As used in this section, the term:
(1)	'Mental illness' has the same meaning as defined in G.S. 122C-3(21); and
(2)	'Chemical dependency' has the same meaning as defined in G.S. 58-65-75
with a diagnosis found in the Diagnostic and Statistical Manual of Mental Disorders DSM-IV or the International Classification of Diseases ICD/9/CM, or a later edition of those manuals.
(b)	No corporation governed by this Chapter shall, solely because an individual to be insured has or had a mental illness or chemical dependency:
(1)	Refuse to issue or deliver to that individual any individual or group hospital, dental, medical or health service contract in this State that affords benefits or coverage for medical treatment or service for physical illness or injury;
(2)	Have a higher premium rate or charge for physical illness or injury coverages or benefits for that individual; or
(3)	Reduce physical illness or injury coverages or benefits for that individual.
		
(e)	Every insurer that writes a policy or contract of group or blanket health insurance or group or blanket accident and health insurance that is issued, renewed, or amended on or after January 1, 1998, shall provide to its insureds benefits for the necessary care and treatment of mental illness that are not less favorable than benefits for physical illness generally.  Benefits for treatment of mental illness shall be subject to the same durational limits, dollar limits, deductibles, and coinsurance factors as are benefits for physical illness generally."
Section 6. G.S. 58-67-70 reads as rewritten:
"§ 58-67-70.  Coverage for chemical dependency treatment.
(a)	As used in this section, the term ‘chemical dependency' means the pathological use or abuse of alcohol or other drugs in a manner or to a degree that produces an impairment in personal, social or occupational functioning and which may, but need not, include a pattern of tolerance and withdrawal.
(b)	On and after January 1, 1985, every health maintenance organization that writes a health care plan on a group basis and that is subject to this Article shall provide benefits for the necessary care and treatment of chemical dependency that are not less favorable than benefits under the health care plan generally. Benefits for chemical dependency shall be subject to the same durational limits, dollar limits, deductibles, and coinsurance factors as are benefits under the health care plan generally.
			(d)	Provisions for benefits for necessary care and treatment of chemical dependency in group health care plans shall provide for benefit payments for the following providers of necessary care and treatment of chemical dependency:
(1)	The following units of a general hospital licensed under Article 5 of General Statutes Chapter 131E:
a.	Chemical dependency units in facilities licensed after October 1, 1984;
b.	Medical units;
c.	Psychiatric units; and
(2)	The following facilities or programs licensed after July 1, 1984, under Article 2 of General Statutes Chapter 122C:
a.	Chemical dependency units in psychiatric hospitals;
b.	Chemical dependency hospitals;
c.	Residential chemical dependency treatment facilities;
d.	Social setting detoxification facilities or programs;
e.	Medical detoxification facilities or programs; and
(3)	Duly licensed physicians and duly licensed practicing psychologists and certified professionals working under the direct supervision of such physicians or psychologists in facilities described in (1) and (2) above and in day/night programs or outpatient treatment facilities licensed after July 1, 1984, under Article 2 of General Statutes Chapter 122C.
Provided, however, that nothing in this subsection shall prohibit any plan from requiring the most cost effective treatment setting to be utilized by the person undergoing necessary care and treatment for chemical dependency.
	(f)	Notwithstanding any other provision of this section or Article, any health maintenance organization subject to this Article that becomes a qualified health maintenance organization under Title XIII of the United States Public Health Service Act shall provide the benefits required under that federal Act, which shall be deemed to constitute compliance with the provisions of this section; and any health maintenance organization may provide that the benefits provided under this section must be obtained through providers affiliated with the health maintenance organization."
Section 7. G.S. 58-67-75 reads as rewritten:
"§ 58-67-75.  No discrimination against the mentally ill and chemically dependent.
(a)	As used in this section, the term:
(1)	'Mental illness' has the same meaning as defined in G.S. 122C-3(21); and
(2)	'Chemical dependency' has the same meaning as defined in G.S. 58-67-70
with a diagnosis found in the Diagnostic and Statistical Manual of Mental Disorders DSM-IV or the International Classification of Diseases ICD/9/CM, or a later edition of those manuals.
(b)	No health maintenance organization governed by this Chapter shall, solely because an individual has or had a mental illness or chemical dependency:
(1)	Refuse to enroll that individual in any health care plan covering physical illness or injury;
(2)	Have a higher premium rate or charge for physical illness or injury coverages or benefits for that individual; or
(3)	Reduce physical illness or injury coverages or benefits for that individual.
		(e)	Every insurer that writes a policy or contract of group or blanket health insurance or group or blanket accident and health insurance that is issued, renewed, or amended on or after January 1, 1998, shall provide to its insureds benefits for the necessary care and treatment of mental illness that are not less favorable than benefits for physical illness generally.  Benefits for treatment of mental illness shall be subject to the same durational limits, dollar limits, deductibles, and coinsurance factors as are benefits for physical illness generally."
Section 8. G.S. 135-40.7A reads as rewritten:
"§ 135-40.7A.  Special provisions for chemical dependency.
(a)	Benefits for treatment of chemical dependency are covered by the Plan and shall be subject to the same deductibles, durational limits, and coinsurance factors as are benefits for physical illness generally.
			(c)	Notwithstanding any other provision of this Part, provisions for benefits for necessary care and treatment of chemical dependency under this Part shall provide for benefit payments for the following providers of necessary care and treatment of chemical dependency:
(1)	The following units of a general hospital licensed under Article 5 of General Statutes Chapter 131E:
a.	Chemical dependency units in facilities licensed after October 1, 1984;
b.	Medical units;
c.	Psychiatric units; and
(2)	The following facilities licensed after July 1, 1984, under Article 2 of General Statutes Chapter 122C:
a.	Chemical dependency units in psychiatric hospitals;
b.	Chemical dependency hospitals;
c.	Residential chemical dependency treatment facilities;
d.	Social setting detoxification facilities or programs;
e.	Medical detoxification facilities or programs; and
(3)	Duly licensed physicians and duly licensed practicing psychologists, certified clinical social workers, licensed professional counselors, certified fee-based practicing pastoral counselors, certified clinical specialists in psychiatric and mental health nursing, and certified professionals working under the direct supervision of such physicians or psychologists in facilities described in (1) and (2) above and in day/night programs or outpatient treatment facilities licensed after July 1, 1984, under Article 2 of General Statutes Chapter 122C.
Provided, however, that nothing in this subsection shall prohibit the Plan from requiring the most cost effective treatment setting to be utilized by the person undergoing necessary care and treatment for chemical dependency."
Section 9. G.S. 135-40.7B reads as rewritten:
"§ 135-40.7B.  Special provisions for mental health benefits.
(a)	Except as otherwise provided in this section, benefits for the treatment of mental illness are covered by the Plan and shall be subject to the same deductibles, durational limits, and coinsurance factors as are benefits for physical illness generally.
(b)	Notwithstanding any other provision of this Part, the following necessary services for the care and treatment of mental illness shall be covered under this section: allowable institutional and professional charges for inpatient psychiatric care, outpatient psychotherapy, intensive outpatient crisis management, partial hospitalization treatment, and residential care and treatment. The benefits provided by this section are separate and apart from those provided by G.S. 135-40.7A.
(c)	Notwithstanding any other provisions of this Part, the following providers are authorized to provide necessary care and treatment for mental illness under this section:
(1)	Licensed psychiatrists;
(2)	Licensed or certified doctors of psychology;
(3)	Certified clinical social workers;
(3a)	Licensed professional counselors;
(4)	Psychiatric nurse specialists;
	(6)	Psychological associates with a master's degree in psychology under the direct employment and supervision of a licensed psychiatrist or licensed or certified doctor of psychology;
(7)	Licensed psychiatric hospitals and licensed general hospitals providing psychiatric treatment programs;
(8)	Certified residential treatment facilities, community mental health centers, and partial hospitalization facilities; and
(9)	Certified fee-based practicing pastoral counselors.
(d)	Benefits provided under this section shall be subject to a managed, individualized care component consisting of (i) inpatient utilization review through preadmission and length-of-stay certification for scheduled inpatient admissions and length-of-stay reviews for unscheduled inpatient admissions, and (ii) a network of qualified, available providers of inpatient and outpatient psychiatric treatment psychotherapy. Where qualified preferred providers of inpatient and outpatient care are reasonably available, use of providers outside of the preferred network shall be subject to a twenty percent (20%) coinsurance rate up to five thousand dollars ($5,000) per fiscal year to be assessed against each covered individual in addition to the general coinsurance percentage and maximum fiscal year amount specified by G.S. 135-40.4 and G.S. 135-40.6."
Section 10. This act is effective when it becomes law and applies to contracts issued, delivered, or renewed on or after January 1, 1998.