1. (a) An insurer shall base any medical necessity determination, and the utilization review criteria that the insurer, or any entity acting on the insurer's behalf, applies to determine the medical necessity of health care services and benefits for the diagnosis, prevention, and treatment of mental health conditions and substance use disorders, on current generally accepted standards of mental health and substance use disorder care.

2. (b) In conducting utilization review of a health care benefit for a mental health condition or substance use disorder in children, adolescents, or adults, an insurer shall:

   1. (1) Apply the clinical criteria and guidelines set forth in the most recent versions of treatment criteria developed by nonprofit professional associations for the relevant clinical specialty.
   2. (2) Not apply different, additional, conflicting, or more restrictive utilization review criteria than the clinical criteria and guidelines set forth in the most recent versions of treatment criteria developed by nonprofit professional associations for the relevant clinical specialty.

   3. (3) Apply the definition of medical necessity set forth in Section 2562.01.

      1. (A) American Academy of Child and Adolescent Psychiatry.
      2. (B) American Academy of Family Physicians.
      3. (C) American Academy of Neurology.
      4. (D) American Academy of Pediatrics.
      5. (E) American Academy of Sleep Medicine.
      6. (F) American Association for Community Psychiatry.
      7. (G) American College of Physicians.
      8. (H) American Medical Association.
      9. (I) American Psychiatric Association.
      10. (J) American Psychological Association.
      11. (K) American Society of Addiction Medicine.
      12. (L) Canadian Network for Mood and Anxiety Treatments.
      13. (M) Council of Autism Service Providers.
      14. (N) World Professional Association for Transgender Health.

      (c)(1) An insurer shall apply the clinical criteria and guidelines set forth in the most recent versions of treatment criteria developed by nonprofit professional associations for the relevant clinical specialty, including recommendations based on consensus expert opinion, whenever their application would determine the medical necessity of a health care benefit for a mental health condition or substance use disorder that is under consideration in utilization review. Subject to subdivisions (c)(2) and (c)(3) of this section, clinical criteria developed by the following nonprofit professional associations, and any other nonprofit professional associations that are not specified in this subdivision, shall be used exclusively to make utilization review coverage determinations that are within the scope of the criteria:

   4. (2) If a guideline, clinical criterion, or set of criteria that would otherwise be required by this section was not developed pursuant to a process that satisfied each of the requirements stated in subdivisions (c)(2)(A) through (c)(2)(E), below, then an insurer may elect to apply alternate utilization review criteria that were developed in accordance with subdivision (a) of this section, subject to compliance with Insurance Code section 10144.4 and any other applicable requirements. The provisions of this subdivision (c)(2) shall not apply to the instruments required by subdivision (a) of Section 2562.03.

      1. (A) The guideline describes the process by which it was developed and funded, including disclosing any funding sources and the identity and professional qualifications of the individual members of the group responsible for developing the guideline, or if the process is not described therein, the nonprofit professional association provides a description upon request.
      2. (B) The nonprofit professional association managed disclosures of interest and conflicts of interest with respect to development of the guideline pursuant to a duly adopted, publicly accessible policy that reflects consideration of incorporating best practices in managing disclosures of interest and conflicts of interest in the development of clinical practice guidelines. Best practices include recommendations of the Council of Medical Specialty Societies in “Principles for the Development of Specialty Society Clinical Guidelines” (2012), incorporated by reference, and “Code for Interactions with Companies” (2015), incorporated by reference, and similar recommendations from reputable sources such as the National Academy of Medicine.
      3. (C) The nonprofit professional association excluded any external, for-profit entities that develop, produce, market, or distribute drugs, devices, services, or therapies used to diagnose, treat, monitor, manage, or alleviate health conditions from directly funding, influencing, or otherwise contributing to the development of the guideline.
      4. (D) The nonprofit professional association performed a systematic review of the evidence as part of the guideline development process, and the review methodology is described in the guideline, or if the methodology is not described therein, the nonprofit professional association provides a description upon request.

      5. (E) In a guideline that is initially developed or that was last reviewed following the effective date of this section, with respect to a particular clinical recommendation or criterion, the guideline summarizes the relevant available evidence, describes potential benefits and harms, and appraises the quality of the evidence and strength of the recommendation.

         (3)(A) If the nonprofit professional association that developed a guideline containing a clinical criterion or set of criteria that would otherwise be required by this section indicates that such criteria will not necessarily remain clinically valid or representative of current generally accepted standards of mental health and substance use disorder care after a defined period of time, or if a guideline was initially developed or last reviewed for new evidence affecting clinical recommendations in the guideline more than five years prior, then after the prescribed period of time an insurer may confirm with the nonprofit professional association in writing whether it has reviewed, or plans to review, new evidence to assess the continued clinical validity of the criteria and recommendations in the guideline. The provisions of this subdivision (c)(3) shall not apply to the instruments required by subdivision (a) of Section 2562.03.

      6. (B) If a nonprofit professional association confirms that it does not intend to review new evidence to assess the continued clinical validity of the criteria and recommendations in the guideline within one year of receiving the insurer's inquiry, or does not respond to at least four separate written inquiries sent over a period of 120 days through tracked mailings, then an insurer may elect to apply alternate utilization review criteria that were developed in accordance with subdivision (a) of this section, subject to compliance with Insurance Code section 10144.4 and any other applicable requirements.
   5. (4) If an insurer elects to apply alternate utilization review criteria under subdivision (c)(2) or (c)(3) of this section, then the insurer shall submit written documentation to the Department demonstrating that the criteria in the guideline are eligible for disqualification under the standards set forth in this subdivision (c), along with the utilization review criteria that it proposes to implement in place of any disqualified criteria, at least 120 days in advance of the proposed implementation date. The proposed utilization review criteria shall be subject to Section 2562.04.
3. (d) In conducting utilization review of a health care benefit for a mental health condition or substance use disorder, if applying clinical criteria developed by a nonprofit professional association would determine whether a health care benefit is medically necessary, that determination is within the scope of the criteria within the meaning of subdivision (c) of Insurance Code section 10144.52. In such circumstances, nonprofit professional association clinical criteria shall be used, to the exclusion of criteria from any other source, to make a coverage determination.

4. (e) An insurer shall specifically document the source of each clinical criterion that it uses to conduct utilization review of a health care benefit for a mental health condition or substance use disorder. If an insurer purchases or licenses a clinical policy for utilization review from another entity, the insurer shall verify and document before use that:

   1. (1) The source of each clinical criterion is specifically documented.

   2. (2) Either of the following:

      1. (A) All the criteria were sourced from nonprofit professional association treatment criteria without alteration.
      2. (B) In the event that nonprofit professional association clinical criteria that would determine the medical necessity of a health care benefit do not exist, the clinical policy was developed in accordance with subdivision (a) of this section by documenting the sources, and evidence supporting the clinical appropriateness, of each of the utilization review criteria.

Note: Authority cited: Sections 10144.5, 10144.52 and 10144.57, Insurance Code. Reference: Sections 10123.135, 10123.191, 10123.193, 10123.195, 10123.197, 10123.201, 10144.4, 10144.5, 10144.51, 10144.52, 10144.53 and 10144.57, Insurance Code.

History

1. New section filed 6-26-2025; operative 6-26-2025 pursuant to Government Code section 11343.4(b)(3) (Register 2025, No. 26).