Effective as of May 16, 2017, Public Laws of 2017, Chapter 28 (Chapter 28) will require fully insured health benefit plans issued in New Jersey, the State benefit plan, and the school employees’ health benefit plan to provide and administer certain benefits for the treatment of substance use disorders in a specific way, relying upon the definition of “substance use disorder” of the American Psychiatric Association in the Diagnostic and Statistical Manual of Mental Disorders, 5th Edition and subsequent additions. Substance use disorders will include substance use withdrawal, and the diagnosis of substance use disorder can be applied to the following classes:

• alcohol;
• cannabis;
• hallucinogens;
• inhaled opiates;
• sedatives;
• hypnotics or anxiolytics;
• stimulants;
• tobacco; and
• others

The Department of Banking and Insurance has thus far issued two bulletins to the marketplace to provide guidance on implementation of Chapter 28. See Bulletin No. 17-01 (March 16, 1017) and Bulletin No. 17-05 (May 8, 2017) Chapter 28 requires carriers to provide unlimited in-patient and out-patient benefits for the treatment of substance use disorder at network facilities. As out-patient benefits are not always provided by facilities, the Department’s Bulletin interprets network facilities to mean network providers, thus encompassing both facilities and physicians and other practitioners that render in-patient and out-patient care. There do remain limits on out-of-network substance use disorder benefits, however. Only in the case of an in-plan exception, will a person covered under a PPO or POS plan who voluntarily uses an out-of-network provider be entitled to the protections of Chapter 28 with respect to those out-of-network services.

Chapter 28 requires carriers to provide benefits for the first 180 days per plan year of in-patient and out-patient treatment of substance use disorder without prior authorization or other prospective utilization management requirements when determined medically necessary by the covered person’s physician, psychologist or psychiatrist. Accordingly, a new 180-day period commences at the beginning of each new plan year. Additionally, carriers are required to provide benefits for the first 28 days of an in-patient stay during each plan year without retrospective or concurrent review, or medical necessity having been determined by the covered person’s physician, psychologist or psychiatrist. A new 28-day period commences at the beginning of each new plan year. Examples are set forth in the May 8 Bulletin to illustrate application of the laws under situations where in-patient stays and out-patient services can cross plan years.

During the first 180 days of in-patient or out-patient network services for the treatment of substance use disorder per plan year, the determination of medical necessity is made by the covered person’s medical professionals as noted above. Carriers are prohibited from engaging in any prior authorization or utilization management activity even if a provider might request it. However, carriers are permitted to begin concurrent review as of day 29 of an in-patient stay. With regard to services rendered during days 1-28, carriers are prohibited from requesting information from the facility or the covered person’s treating providers for any purpose, except that, upon notice by the provider of plans for continuing care beyond day 28, carriers may initiate discussions with the provider to facilitate concurrent review of days 29 and beyond. After day 28, if there is a determination that a continued stay is not medically necessary, the carrier must provide the required notice within 24 hours of the determination with appeal rights and the covered person’s stay in the facility is covered until the day after all appeals are exhausted, even where the carrier’s determination is upheld.

In the event of an emergency admission to an out-of-network hospital, the covered person must comply with the emergency admission requirements stated in his plan or policy. Since the hospital is not a network provider, the provisions of Chapter 28 do not apply to the emergency admission to an out-of-network hospital. Under those circumstances, the carrier may review whether the admission qualifies as an emergency admission, and the medical necessity of admission and continued stay may also be reviewed.

Chapter 28 requires that benefits for out-patient prescription drugs for the first 180 days not be subject to any prior authorization or prospective utilization management, but rather are provided when determined necessary by the covered person’s physician, psychologist or psychiatrist. Cost-sharing for covered prescription drugs is the applicable cost sharing required by the covered person’s plan.

Finally, Chapter 28 does address multiple diagnoses. Benefits required by Chapter 28 are to be provided to all covered persons with a diagnosis of substance use disorder. The presence of additional related or unrelated diagnoses shall not be a basis to reduce or deny the benefits required by Chapter 28. However, Chapter 28 does not apply to care provided for other conditions or medical diagnoses, even if the patient is being separately treated for substance use disorder. Accordingly, if the treatment is entirely unrelated to the treatment of substance use disorder, carriers may apply normal utilization management. On the other hand, if any part of the treatment to be provided is to treat substance use disorder, then Chapter 28 applies to the treatment of the substance use disorder. Helpful examples are set forth in the Department’s May 2017 Bulletin, as is a summary chart which identifies by services and supplies, and the time period of treatment, the level, if any, of utilization management permitted under Chapter 28.

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