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California Parity Act — Coverage for ACT, IHBT, and ICM (Fully Insured Commercial Plans)

Defines coverage and prior authorization changes for three behavioral health services (Assertive Community Treatment, Intensive Home-Based Treatment, Intensive Case Management) for Fully Insured Commercial health plans in California under SB 855; affects providers delivering these services to eligible members.

Policy Summary

PayerOptum

PolicyCalifornia Parity Act — Coverage for ACT, IHBT, and ICM (Fully Insured Commercial Plans)

Policy CodePolicy N/A

Change TypeAdded coverage / removed prior authorization

Effective DateApr 1, 2024

Next Review DateN/A

Key ActionDo not submit prior authorization requests for ACT, IHBT, or ICM when services meet medical necessity for Fully Insured Commercial members.

SourceLink

POLICY UPDATE CHANGES

Three services (Assertive Community Treatment, Intensive Home-Based Treatment, Intensive Case Management) will not require prior authorization for Fully Insured Commercial health plans.

Effective dates for DMHC and CDI approvals are April 1, 2024 and June 26, 2025 respectively.

3additional services covered without prior authorization

24/7ACT availability (hours per day)

under 21Age limit for IHBT eligibility

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Service model for ACT

Coverage and Medical Necessity

Covered services with medical necessity

Covered when ALL of the following are met:

General: Service is being provided to a member of a Fully Insured Commercial health plan in California and is medically necessary to prevent, diagnose, or treat a mental health or substance use disorder.

Supported by SB 855 updates

Assertive Community Treatment (ACT): ACT is provided as a multidisciplinary team delivering community-based psychiatric treatment and support on a long-term basis with continuity of caregivers; services are provided in the person’s natural environment and are available 24/7 as clinically needed.

Primarily for adults with severe and persistent mental illness, including co-occurring conditions

Intensive Home-Based Therapy (IHBT): Beneficiary is under 21, meets medical necessity criteria, and receives IHBT per an individualized, trauma-informed treatment plan coordinated with the family and overall service plan.age < 21

Services include assessment, plan development, and therapy

Intensive Case Management (ICM): Beneficiary is under 21, meets medical necessity criteria, and receives targeted case management including assessment, monitoring/adapting, and coordination through an ICM Coordinator to access medically necessary services.age < 21

Includes family collaboration and culturally and linguistically competent care

No specific exclusions are listed for these services in the source document; however, coverage is conditional. Services are covered only when they meet medical necessity requirements and apply to members of Fully Insured Commercial health plans in California. The three services added to basic health care coverage without prior authorization are Assertive Community Treatment (ACT), Intensive Home‑Based Therapy (IHBT), and Intensive Case Management (ICM), and each must be provided in a manner consistent with the policy’s clinical criteria to be considered covered.

Services provided to beneficiaries who do not meet the policy’s medical necessity criteria or the specified age requirements are not supported by this policy. In particular, both IHBT and ICM are described as services for beneficiaries under 21, and care delivered to individuals who fail to meet these criteria may be considered not medically necessary and subject to denial.

Provider Actions, Authorization, and Documentation

Note

Prior Authorization Not Required

No prior authorization is required for three behavioral health services for Fully Insured Commercial health plans effective 2024-04-01. This is a policy change: affected services include Assertive Community Treatment, Intensive Home-Based Treatment (IHBT), and Intensive Case Management (ICM).

Assertive Community Treatment (ACT)
Intensive Home-Based Treatment (IHBT)
Intensive Case Management (ICM)

Step Therapy

Step therapy rules: None specified. No step therapy requirements apply to the three services named in this policy; providers should not impose or be subject to a step requirement prior to delivering Assertive Community Treatment, IHBT, or ICM for eligible beneficiaries.

Service Definitions

Assertive Community Treatment (ACT) — key attributes

DefinitionMultidisciplinary team approach providing acute, active, ongoing community-based psychiatric treatment, assertive outreach, rehabilitation, and support primarily for adults with severe and persistent mental illness.

Primary goalsMaximize recovery, support consumer-directed goals, foster hope and empowerment, and help persons become respected members of the community.

Target populationAdults with severe and persistent mental illness, often with co-occurring conditions (e.g., substance use, homelessness, justice involvement).

Service delivery characteristicsTeam assumes responsibility for directly providing services in the person’s natural community settings rather than traditional office-based care.

Scope of servicesPsychosocial treatment, assertive outreach, rehabilitation, and ongoing support with continuity of care by the ACT team.

Level-of-Care: When Each Service Applies

Treatment Modalities and Service Components

Assertive Community Treatment (ACT) — treatment modality criteria

ACT Service Characteristics: Services are comprehensive, individualized, primarily provided by ACT team members, held in the person’s natural environment, available 24 hours a day, 7 days a week, and vary in intensity based on the needs of the person served; services are modified as needed through ongoing assessment and treatment planning.

Continuity of caregivers over time; majority provided directly by ACT team

Intensive Home-Based Therapy (IHBT) — treatment modality criteria

IHBT Components: Includes assessment, individualized plan development, and therapy provided according to an individualized, trauma-informed treatment plan and coordinated with the family's overall service plan to improve functioning in the home and community for beneficiaries under 21.age < 21

Strengths-based interventions focused on skill building and family capacity

Background and Context

Assertive Community Treatment (ACT) is a multidisciplinary, community‑based model that assumes responsibility for directly providing comprehensive psychiatric treatment, rehabilitation, outreach, and support in the person’s natural environment. ACT emphasizes continuity of caregivers, individualized services that vary in intensity based on need, and availability around the clock as clinically required, delivering long‑term, team‑based care for adults with severe and persistent mental illness.

Policy Summary

PayerOptum

PolicyCalifornia Parity Act — Coverage for ACT, IHBT, and ICM (Fully Insured Commercial Plans)

Policy CodePolicy N/A

Change TypeAdded coverage / removed prior authorization

Effective DateApr 1, 2024

Next Review DateN/A

Key ActionDo not submit prior authorization requests for ACT, IHBT, or ICM when services meet medical necessity for Fully Insured Commercial members.

SourceLink

On This Page

Documentation Required

Required Documentation

Required documentation must support medical necessity and individualized, trauma-informed planning for beneficiaries under 21 receiving IHBT or ICM. Documentation must include an individualized treatment plan for IHBT (developed in accordance with trauma-informed care and coordinated with the family's service plan) and ICM documentation of assessment, ongoing monitoring/adaptation, and the role of the ICM Coordinator.

IHBT: individualized treatment plan, trauma-informed care alignment, family coordination, assessment, plan development, therapy
ICM: assessment records, monitoring and adaptation notes, care planning and coordination documentation, ICM Coordinator activities (accessing/coordinating services, facilitating collaborative family/system relationships, support for caregiver, CFT establishment and coordination)

Denial Risk

Denial Triggers

Denial triggers: Claims or authorization requests may be denied if medical necessity criteria are not met for IHBT or ICM provided to beneficiaries under age 21. Failure to provide the required individualized treatment plan, evidence of trauma-informed care coordination with the family, adequate assessment or ongoing monitoring/adaptation documentation, or documentation of ICM Coordinator activities can result in denial.

Lack of medical necessity documentation for IHBT or ICM for beneficiaries < 21
Missing or incomplete IHBT individualized treatment plan or lack of trauma-informed/family coordination
Insufficient ICM assessment, monitoring/adaptation records, or missing ICM Coordinator documentation

Intensive Home-Based Therapy (IHBT) — child/youth home-based intervention

DefinitionIndividualized, strength-based interventions intended to correct or improve mental health conditions that interfere with a child or youth's functioning.

Age eligibilityProvided to beneficiaries under 21 who are eligible and meet medical necessity criteria.

Clinical aimsBuild skills for successful functioning in home and community and improve the family's ability to support the child or youth.

Care planningDelivered per an individualized treatment plan developed in accordance with trauma-informed care and coordinated with the family and overall service plan.

Intensive Case Management (ICM) — targeted case management

DefinitionTargeted case management service that facilitates assessment, care planning, and coordination of services.

Age eligibilityProvided to beneficiaries under age 21 who meet medical necessity criteria for this service.

Core functionsAssessment, care planning, monitoring and adapting services, and facilitating access to medically necessary services.

Care coordination roleIncludes an ICM Coordinator who ensures medically necessary services are accessed and coordinated across systems and providers.

Intensive Case Management (ICM) — treatment modality criteria

ICM Components: Includes assessing; monitoring and adapting services; facilitating collaborative relationships among the child, family, and systems; and provision of an ICM Coordinator who ensures medically necessary services are accessed, coordinated, and delivered in a strength-based, individualized, client-driven, and culturally and linguistically competent manner.age < 21

Coordinator organizes care, establishes and supports the Child and Family Team, and matches services across providers and systems