Mandatory Coverage of Mental Health Services - AB 88 Effective July 1, group and individual health plans must cover full treatment for severe mental illness of all members and serious emotional disorders of children on the same terms as for other medical conditions. Required coverage includes inpatient and outpatient services, psychiatric daycare and drugs if covered under the plan. AB 88 does not permit a health plan to exclude this coverage because an employer has carved out or made other arrangements for mental health coverage. All health plans must add this coverage to all group and individual health plans that they issue or renew after July 1, 2000.

• Serious mental illnesses include:
• Schizophrenia Obsessive-compulsive disorder 
• Schizoaffective disorder (symptoms suggesting both schizophrenic and mood disturbances)
• Pervasive development disorder or autism
• Bipolar disorder (manic-depressive illness)
• Anorexia nervosa
• Panic disorder
• Bulimia nervosa

A child diagnosed with "serious emotional disturbances" meets both of the following symptoms:

1. Has one or more mental disorders as identified in the current edition of Diagnostic and Statistical Manual of Mental Disorders (other than primary substance use or developmental disorder) that results in behavior inappropriate for the child's age according to developmental norms

2. Meets criteria of the Welfare and Institutions Code

Children must also meet criteria related to impairment, risk, educational and other factors.

Substance abuse is not a covered condition under AB 88.

Depending on the insurance carrier employers may be able to purchase an optional inpatient substance abuse benefit.

Phenylketonuria (PKU) must now be covered by health plans as follows:

• Appropriate testing and treatment (already covered by Blue Shield);

• Medically-necessary formulas and special food products that are part of a diet designed to avert development of PKU-related physical and mental disabilities.

In order to be covered, special food products must be used in the place of normal food and be prescribed as medically necessary by a physician or other practitioner and managed by a health care professional.

Coverage does not include food that is naturally low in protein, but may include "a food product that is specially formulated to have less than one gram of protein per serving." Coverage is provided for any costs in excess of the monthly cost of food for a normal diet.

Under this law, health plans are required to cover all "generally medically accepted" cancer screening tests -subject to all terms and conditions that would otherwise apply.

1 /1 /2000 & 7/1 /2000) The Financial Solvency Standards Board in the Department of Managed Care (DMC) was created to develop and recommend requirements and standards and advise the Director of DMC on provider solvency issues. The Director must adopt regulations on reviewing and grading solvency of at-risk providers by 6/30/2000. As of 7/1/2000, plan contracts with at-risk providers must include provisions regarding disclosure of financial information to plan by providers.