SD7 - Coverage for Biologically Based Mental Illness


Executive Summary:
Senate Bill 430 was passed by the 1999 General Assembly. It was effective on January 1, 2000. The law requires insurers proposing to issue group accident and sickness insurance policies providing hospital, medical and surgical or major medical coverage on an expense-incurred basis; corporations providing group subscription contracts; and health maintenance organizations (HMOs) providing health care plans to provide coverage for biologically based mental illnesses.

A “biologically based mental illness” is defined as “any mental or nervous condition caused by a biological disorder of the brain that results in a clinically significant syndrome that substantially limits the person’s functioning.” Specifically, the following diagnoses are defined as a biologically based mental illnesses, as they apply to adults and children: schizophrenia, schizoaeffective disorder, bipolar disorder, major depressive disorder, panic disorder, obsessive-compulsive disorder, attention deficit hyperactivity disorder, autism, and drug and alcohol addition.

The benefits for the biologically based mental illnesses may be different from benefits for other illnesses, conditions or disorders if the benefits meet the medical criteria necessary to achieve the same outcomes achieved by the benefits for any other illness, condition or covered disorder. However, the coverage for biologically based mental illnesses is to be neither different nor separate from coverage for any other illness, condition or disorder for purposes of determining deductibles, benefit year or lifetime durational limits, benefit year or lifetime dollar limits lifetime episodes or treatment limits, or co-payment and coinsurance factors.

The law does not preclude the undertaking of usual and customary procedures to determine the medical necessity and appropriateness of treatment, provided that all medical necessity and appropriateness determinations are made in the same manner as for other illnesses, conditions, or disorders.

Subsection F provides that the law does not apply to (i) short-term travel, accident only, limited or specified disease policies, or (ii) short-term nonrenewable policies of not more than six months’ duration, or (iii) policies, contracts, or plans in the individual market or small group markets to employers with 25 or fewer employers, or (iv) policies or contracts designed for persons eligible for Medicare or other similar coverage under state or federal plans. The law also amends § 2.1-20.1 in the requirements of coverage for state employees to include similar language.

The law amends existing § 38.2-3412.1 to provide that § 38.2-3412.1 does not apply to “biologically based mental illnesses” as defined in § 38.2-3412.1:01 unless coverage for mental illness is not otherwise available pursuant to § 38.2-3412.1:01.

The law has a “sunset” provision under which it will expire on July 2, 2004. Prior to that date, the Advisory Commission is to conduct a study to determine the effects, if any, of the coverage required under § 38.2-3412.1:01 on claims experience for and costs of policies, contracts, or plans. The Advisory Commission is required to submit its written report no later than December 1, 2001, 2002 and 2003.