Therapy in L.A.


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September 1999

Two Important Managed Care Reform Bills Have Been Approved by the California Legislature

The Los Angeles Times reported on September 10, 1999 that an ambitious plan to reform HMOs is nearing completion in the California State legislature. The California senate has approved a bill sponsored by the consumer group Health Access of California that requires employers who offer health care plan coverage to offer coverage for severe mental illness. Health plans must include medication, therapy, hospital stays and other necessary treatment for the following mental illnesses: schizophrenia, bipolar disorder, major depression, panic disorder, schizoaffective disorder, obsessive-compulsive disorder, pervasive developmental disorder or autism, anorexia and bulimia.

The insurance industry is most worried about this portion of the reform package. Most large employers already have such coverage. But premiums for small employers and individuals could increase substantially. The legislation would also require health insurance companies to offer broad mental health care for children. Carla Jacobs, a board member of the National Alliance for the Mentally Ill has praised the bill. "Finally, with this bill we take a step toward solving the problem of discrimination against people with mental illness," she stated. "This will help prevent families from mortgaging their homes and going into bankruptcy to care for their loved ones."

On September 9, 1999, the Los Angeles Times reported that the California assembly overwhelmingly approved a reform bill that would enable Californians to sue their health care providers for damages. At present, government employees and legislators can sue their HMO' for punitive damages, but about 14 million Californians whose health care insurance is provided by private employers cannot file such suits. The bill allows for suits when there is "substantial harm" to the individual including death, loss or significant impairment, disfigurement, severe and chronic pain or substantial financial loss. Currently, managed mental health care can deny authorizations for continuing treatment sessions based on a very ambiguous definition of "medical necessity" that often has more to do with the type of mental health care product the company has purchased for employees than any clear guidelines for necessary treatment. With this bill, the insurance companies would be held responsible in a court of law for decisions to deny authorizations for continued treatment of mental illnesses that lead to "substantial harm".

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