H.B. 123

1

MENTAL HEALTH PARITY
2 2000 GENERAL SESSION
3 STATE OF UTAH
4 Sponsor: Bryan D. Holladay
5 AN ACT RELATING TO INSURANCE; REQUIRING, THROUGH A THREE-YEAR PHASE
6 IN, AN INSURER TO OFFER AT LEAST ONE HEALTH INSURANCE POLICY THAT
7 COVERS SERIOUS MENTAL ILLNESS TO THE SAME EXTENT AS PHYSICAL ILLNESS;
8 PERMITTING POLICYHOLDERS TO CHOOSE WHETHER OR NOT TO SELECT THE
9 POLICY AND CLARIFYING THAT AN INCREASED PREMIUM MAY BE CHARGED;
10 PERMITTING POLICIES THAT COMPLY TO USE MANAGED CARE SYSTEMS AND TO
11 BE EXEMPT FROM CERTAIN INSURANCE PROVISIONS; MAKING IT UNLAWFUL
12 CONDUCT TO KNOWINGLY PROVIDE A FALSE OR MISLEADING DIAGNOSIS; AND
13 PROVIDING A REPEAL DATE.
14 This act affects sections of Utah Code Annotated 1953 as follows:
15 AMENDS:
16 31A-22-617, as last amended by Chapters 314 and 316, Laws of Utah 1994
17 31A-22-618, as last amended by Chapter 204, Laws of Utah 1986
18 58-60-109, as last amended by Chapter 248, Laws of Utah 1997
19 58-61-501, as enacted by Chapter 32, Laws of Utah 1994
20 58-67-501, as last amended by Chapter 227, Laws of Utah 1997
21 63-55-231, as last amended by Chapter 131, Laws of Utah 1999
22 ENACTS:
23 31A-22-625, Utah Code Annotated 1953
24 Be it enacted by the Legislature of the state of Utah:
25 Section 1. Section 31A-22-617 is amended to read:
26 31A-22-617. Preferred provider contract provisions.
27 Health insurance policies may provide for insureds to receive services or reimbursement

28 under the policies in accordance with preferred health care provider contracts as follows:
29 (1) Subject to restrictions under this section, any insurer or third party administrator may
30 enter into contracts with health care providers as defined in Section 78-14-3 under which the health
31 care providers agree to supply services, at prices specified in the contracts, to persons insured by
32 an insurer. The health care provider contract may require the health care provider to accept the
33 specified payment as payment in full, relinquishing the right to collect additional amounts from
34 the insured person. The insurance contract may reward the insured for selection of preferred health
35 care providers by reducing premium rates, reducing deductibles, coinsurance, or other copayments,
36 or in any other reasonable manner.
37 (2) (a) Subject to Subsections (2)(b) through (2)(f), an insurer using preferred health care
38 provider contracts shall pay for the services of health care providers not under the contract, unless
39 the illnesses or injuries treated by the health care provider are not within the scope of the insurance
40 contract. As used in this section, "class of health care providers" means all health care providers
41 licensed or licensed and certified by the state within the same professional, trade, occupational, or
42 facility licensure or licensure and certification category established pursuant to Titles 26 and 58.
43 (b) When the insured receives services from a health care provider not under contract, the
44 insurer shall reimburse the insured for at least 75% of the average amount paid by the insurer for
45 comparable services of preferred health care providers who are members of the same class of
46 health care providers. The commissioner may adopt a rule dealing with the determination of what
47 constitutes 75% of the average amount paid by the insurer for comparable services of preferred
48 health care providers who are members of the same class of health care providers.
49 (c) When reimbursing for services of health care providers not under contract, the insurer
50 may make direct payment to the insured.
51 (d) Notwithstanding Subsection (2)(b), an insurer using preferred health care provider
52 contracts may impose a deductible on coverage of health care providers not under contract.
53 (e) When selecting health care providers with whom to contract under Subsection (1), an
54 insurer may not unfairly discriminate between classes of health care providers, but may
55 discriminate within a class of health care providers, subject to Subsection (7).
56 (f) For purposes of this section, unfair discrimination between classes of health care
57 providers shall include:
58 (i) refusal to contract with class members in reasonable proportion to the number of

59 insureds covered by the insurer and the expected demand for services from class members; and
60 (ii) refusal to cover procedures for one class of providers that are:
61 (A) commonly utilized by members of the class of health care providers for the treatment
62 of illnesses, injuries, or conditions;
63 (B) otherwise covered by the insurer; and
64 (C) within the scope of practice of the class of health care providers.
65 (3) Before the insured consents to the insurance contract, the insurer shall fully disclose
66 to the insured that it has entered into preferred health care provider contracts. The insurer shall
67 provide sufficient detail on the preferred health care provider contracts to permit the insured to
68 agree to the terms of the insurance contract. The insurer shall provide at least the following
69 information:
70 (a) a list of the health care providers under contract and if requested their business
71 locations and specialties;
72 (b) a description of the insured benefits, including any deductibles, coinsurance, or other
73 copayments;
74 (c) a description of the quality assurance program required under Subsection (4); and
75 (d) a description of the grievance procedures required under Subsection (5).
76 (4) (a) An insurer using preferred health care provider contracts shall maintain a quality
77 assurance program for assuring that the care provided by the health care providers under contract
78 meets prevailing standards in the state.
79 (b) The commissioner in consultation with the executive director of the Department of
80 Health may designate qualified persons to perform an audit of the quality assurance program. The
81 auditors shall have full access to all records of the organization and its health care providers,
82 including medical records of individual patients.
83 (c) The information contained in the medical records of individual patients shall remain
84 confidential. All information, interviews, reports, statements, memoranda, or other data furnished
85 for purposes of the audit and any findings or conclusions of the auditors are privileged. The
86 information is not subject to discovery, use, or receipt in evidence in any legal proceeding except
87 hearings before the commissioner concerning alleged violations of this section.
88 (5) An insurer using preferred health care provider contracts shall provide a reasonable
89 procedure for resolving complaints and grievances initiated by the insureds and health care

90 providers.
91 (6) An insurer may not contract with a health care provider for treatment of illness or
92 injury unless the health care provider is licensed to perform that treatment.
93 (7) (a) No health care provider or insurer may discriminate against a preferred health care
94 provider for agreeing to a contract under Subsection (1).
95 (b) Any health care provider licensed to treat any illness or injury within the scope of the
96 health care provider's practice, who is willing and able to meet the terms and conditions established
97 by the insurer for designation as a preferred health care provider, shall be able to apply for and
98 receive the designation as a preferred health care provider. Contract terms and conditions may
99 include reasonable limitations on the number of designated preferred health care providers based
100 upon substantial objective and economic grounds, or expected use of particular services based
101 upon prior provider-patient profiles.
102 (8) Upon the written request of a provider excluded from a provider contract, the
103 commissioner may hold a hearing to determine if the insurer's exclusion of the provider is based
104 on the criteria set forth in Subsection (7)(b).
105 (9) Insurers are subject to the provisions of Sections 31A-22-613.5 , 31A-22-614.5 , and
106 31A-22-618 .
107 (10) Nothing in this section is to be construed as to require an insurer to offer a certain
108 benefit or service as part of a health benefit plan.
109 (11) This section does not apply to mental health benefits provided in a policy that
110 complies with Section 31A-22-625 .
111 Section 2. Section 31A-22-618 is amended to read:
112 31A-22-618. Nondiscrimination among health care professionals.
113 (1) Except as provided under Section 31A-22-617 , and except as to insurers licensed under
114 Chapter 8, no insurer may unfairly discriminate against any licensed class of health care providers
115 by structuring contract exclusions which exclude payment of benefits for the treatment of any
116 illness, injury, or condition by any licensed class of health care providers when the treatment is
117 within the scope of the licensee's practice and the illness, injury, or condition falls within the
118 coverage of the contract. Upon the written request of an insured alleging an insurer has violated
119 this section, the commissioner shall hold a hearing to determine if the violation exists. The
120 commissioner may consolidate two or more related alleged violations into a single hearing.

121 (2) This section does not apply to mental health benefits provided in a policy that complies
122 with Section 31A-22-625 .
123 Section 3. Section 31A-22-625 is enacted to read:
124 31A-22-625. Coverage of serious mental illness.
125 (1) As used in this section:
126 (a) "Managed care system" means:
127 (i) an insurer's contractual arrangements with providers that may include:
128 (A) capitation payments with or without provider risk-sharing;
129 (B) physician or other specified provider gatekeepers;
130 (C) prior authorization of specified services; and
131 (D) general administrative services, including utilization review, claims processing,
132 provider credentialing, and customer service; and
133 (ii) an insurer's limitation on the number and class of providers who may provide services
134 for which coverage for mental illness is required under this section.
135 (b) "Serious mental illness" means one of the following:
136 (i) schizophrenia;
137 (ii) schizo affective disorder;
138 (iii) delusional disorder;
139 (iv) bipolar affective disorders;
140 (v) major depression;
141 (vi) obsessive compulsive disorder; or
142 (vii) anxiety, panic disorders.
143 (2) An insurer shall offer at least one group health insurance policy or one group health
144 maintenance organization contract to potential and existing policyholders that complies with this
145 section.
146 (3) A policyholder:
147 (a) is under no obligation to select a policy or contract that complies with this section; and
148 (b) may be required to pay a higher premium if a policy or contract that complies with this
149 section is selected.
150 (4) To comply with this section, a policy or contract shall:
151 (a) cover inpatient care, extended care, office services, and pharmaceuticals for serious

152 mental illness at no less than:
153 (i) 50% of physical illness from July 1, 2000 to June 30, 2001;
154 (ii) 75% of physical illness from July 1, 2001 to June 30, 2002; and
155 (iii) 100% of physical illness on and after July 1, 2002; and
156 (b) apply cost-sharing factors, such as deductibles, coinsurance, and copayments, to serious
157 mental illness at no less than:
158 (i) 50% of physical illness from July 1, 2000 to June 30, 2001;
159 (ii) 75% of physical illness from July 1, 2001 to June 30, 2002; and
160 (iii) 100% of physical illness on and after July 1, 2002.
161 (5) A contract or policy that complies with Subsection (4) may provide benefits for serious
162 mental illness using a managed care system.
163 (6) The commissioner shall adopt rules as necessary to ensure compliance with this
164 section.
165 Section 4. Section 58-60-109 is amended to read:
166 58-60-109. Unlawful conduct.
167 As used in this chapter, "unlawful conduct" includes:
168 (1) practice of the following unless licensed in the appropriate classification or exempted
169 from licensure under this title:
170 (a) mental health therapy;
171 (b) clinical social work;
172 (c) certified social work;
173 (d) marriage and family therapy;
174 (e) professional counseling;
175 (f) practice as a social service worker; or
176 (g) licensed substance abuse counselor;
177 (2) practice of mental health therapy by a licensed psychologist who has not acceptably
178 documented to the division his completion of the supervised training in mental health therapy
179 required under Subsection 58-61-304 (1)(f); [or]
180 (3) representing oneself as or using the title of any of the following unless currently
181 licensed in a license classification under this title:
182 (a) psychiatrist;

183 (b) psychotherapist;
184 (c) registered psychiatric mental health nurse specialist;
185 (d) mental health therapist;
186 (e) clinical social worker;
187 (f) certified social worker;
188 (g) marriage and family therapist;
189 (h) professional counselor;
190 (i) clinical hypnotist;
191 (j) social service worker; [or]
192 (k) licensed substance abuse counselor[.]; or
193 (4) knowingly providing a false or misleading diagnosis to an insurer to bring a person
194 within the definition of "serious mental illness" for purposes of Section 31A-22-625 .
195 Section 5. Section 58-61-501 is amended to read:
196 58-61-501. Unlawful conduct.
197 As used in this chapter, "unlawful conduct" includes:
198 (1) practice of psychology unless licensed under this chapter or exempted from licensure
199 under this title;
200 (2) practice of mental health therapy by a licensed psychologist who has not acceptably
201 documented to the division his completion of the supervised training in psychotherapy required
202 under Subsection 58-61-304 (1)(f); [or]
203 (3) representing oneself as or using the title of psychologist unless currently licensed under
204 this chapter[.]; or
205 (4) knowingly providing a false or misleading diagnosis to an insurer to bring a person
206 within the definition of "serious mental illness" for purposes of Section 31A-22-625 .
207 Section 6. Section 58-67-501 is amended to read:
208 58-67-501. Unlawful conduct.
209 (1) "Unlawful conduct" includes, in addition to the definition in Section 58-1-501 :
210 (a) buying, selling, or fraudulently obtaining, any medical diploma, license, certificate, or
211 registration;
212 (b) aiding or abetting the buying, selling, or fraudulently obtaining of any medical diploma,
213 license, certificate, or registration;

214 (c) substantially interfering with a licensee's lawful and competent practice of medicine
215 in accordance with this chapter by:
216 (i) any person or entity that manages, owns, operates, or conducts a business having a
217 direct or indirect financial interest in the licensee's professional practice; or
218 (ii) anyone other than another physician licensed under this title, who is engaged in direct
219 clinical care or consultation with the licensee in accordance with the standards and ethics of the
220 profession of medicine; [or]
221 (d) entering into a contract that limits a licensee's ability to advise the licensee's patients
222 fully about treatment options or other issues that affect the health care of the licensee's patients[.];
223 or
224 (e) knowingly providing a false or misleading diagnosis to an insurer to bring a person
225 within the definition of "serious mental illness" for purposes of Section 31A-22-625 .
226 (2) "Unlawful conduct" does not include:
227 (a) establishing, administering, or enforcing the provisions of a policy of disability
228 insurance by an insurer doing business in this state in accordance with Title 31A, Insurance Code;
229 (b) adopting, implementing, or enforcing utilization management standards related to
230 payment for a licensee's services, provided that:
231 (i) utilization management standards adopted, implemented, and enforced by the payer
232 have been approved by a physician or by a committee that contains one or more physicians; and
233 (ii) the utilization management standards does not preclude a licensee from exercising
234 independent professional judgment on behalf of the licensee's patients in a manner that is
235 independent of payment considerations;
236 (c) developing and implementing clinical practice standards that are intended to reduce
237 morbidity and mortality or developing and implementing other medical or surgical practice
238 standards related to the standardization of effective health care practices, provided that:
239 (i) the practice standards and recommendations have been approved by a physician or by
240 a committee that contains one or more physicians; and
241 (ii) the practice standards do not preclude a licensee from exercising independent
242 professional judgment on behalf of the licensee's patients in a manner that is independent of
243 payment considerations;
244 (d) requesting or recommending that a patient obtain a second opinion from a licensee;

245 (e) conducting peer review, quality evaluation, quality improvement, risk management,
246 or similar activities designed to identify and address practice deficiencies with health care
247 providers, health care facilities, or the delivery of health care;
248 (f) providing employment supervision or adopting employment requirements that do not
249 interfere with the licensee's ability to exercise independent professional judgment on behalf of the
250 licensee's patients, provided that employment requirements that may not be considered to interfere
251 with an employed licensee's exercise of independent professional judgment include:
252 (i) an employment requirement that restricts the licensee's access to patients with whom
253 the licensee's employer does not have a contractual relationship, either directly or through contracts
254 with one or more third-party payers; or
255 (ii) providing compensation incentives that are not related to the treatment of any
256 particular patient;
257 (g) providing benefit coverage information, giving advice, or expressing opinions to a
258 patient or to a family member of a patient to assist the patient or family member in making a
259 decision about health care that has been recommended by a licensee; or
260 (h) any otherwise lawful conduct that does not substantially interfere with the licensee's
261 ability to exercise independent professional judgment on behalf of the licensee's patients and that
262 does not constitute the practice of medicine as defined in this chapter.
263 Section 7. Section 63-55-231 is amended to read:
264 63-55-231. Repeal dates, Title 31A.
265 (1) Section 31A-2-208.5 , Comparison tables, is repealed July 1, 2005.
266 (2) Section 31A-22-315 , Motor Vehicle Insurance Reporting, is repealed July 1, 2000.
267 (3) Section 31A-22-625 , Insurance coverage for serious mental illness, is repealed July 1,
268 2005.
269 [(3)] (4) Title 31A, Chapter 31, Insurance Fraud Act, is repealed July 1, 2007.




Legislative Review Note
as of 2-7-00 11:31 AM

A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel