Mental health and substance use disorder coverage and utilization review requirements
Customize your policy alerts
Sign up for all Washington Office of the Insurance Commissioner policy alerts
Know when Washington Office of the Insurance Commissioner releases new policies or updates existing guidance.
Monitor payer policy activity
State statute (ESHB 1432) updates parity, defines medical necessity and clinical review criteria, prohibits prior authorization for initial evaluation + up to 6 visits in a new episode, and sets prior authorization timelines and API requirements.
A new section requires clinical review criteria and utilization review to be consistent with generally accepted standards of mental health and substance use disorder care and patient placement criteria from nonprofit professional associations.
Carriers may not require prior, concurrent, or postservice authorization for an initial evaluation and up to six treatment visits with a contracting provider in a new episode of care; improper prior authorization or denials for those visits may be disallowed and are subject to appeal.
Carriers must meet specified decision timeframes for prior authorization (electronic standard: 3 days; electronic expedited: 1 day; nonelectronic standard: 5 days; nonelectronic expedited: 2 days) and implement interoperable prior authorization APIs with required functionality, with phased deadlines through 2027.
Carriers must maintain, update, and make available clinical review criteria and prior authorization standards; when prior authorization involves prescription drugs, carriers must disclose covered alternatives and associated information.
The statute creates independent external review procedures, requires carriers to forward records within defined timelines, and sets maximum decision windows for expedited external reviews.
Coverage and Applicability
Coverage and utilization review requirements
Covered when a health plan provides medical/surgical benefits and the following requirements are met:
incorporates federal parity rules
Clinical review criteria must meet the requirements of the statute and be applied consistently.
Carriers may not apply conflicting or more restrictive criteria; software decision tools may be used only if they incorporate and apply the placement criteria with fidelity. If the carrier's application is not consistent with the requested placement, any adverse benefit determination notice must include full details of the carrier's assessment under the relevant criteria.
'Meaningful benefits' determined by comparison to medical/surgical benefits; if no core treatment exists for a condition/classification, the carrier is not required to provide one.
These visits remain subject to any plan quantitative treatment limits; referral or prescription requirements that also apply to medical/surgical services are allowed.
Improperly requiring prior authorization for these visits may give rise to an adverse benefit determination subject to appeal.
A health carrier may not limit benefits or coverage for medically necessary mental health and substance use disorder services on the basis that those services should or could be covered by a public entitlement program. Examples of public entitlement programs referenced in the statute include, but are not limited to, special education or an individualized education program, Medicaid, Medicare, Supplemental Security Income, and Social Security Disability Insurance. Carriers also may not include or enforce contract terms that exclude otherwise covered benefits on that basis. This restriction does not require a carrier to cover benefits that have already been authorized and provided by a public entitlement program except where state or federal law otherwise requires coverage.
This section does not apply to prior authorization determinations made pursuant to RCW 48.43.761.
The prohibition on utilization management and other coverage rules in this section does not eliminate the carrier's ability to apply a medical necessity requirement for mental health and substance use disorder services when a comparable medical necessity requirement applies to medical and surgical services. In other words, carriers may still evaluate whether care is medically necessary under standards that are applied consistently across mental health/substance use disorder and medical/surgical services.
Key Definitions
Patient Placement and Level-of-Care Standards
Inpatient/Residential/Partial hospitalization/Outpatient
Level-of-care determinations and utilization review for behavioral health services are governed by the statute's patient placement and clinical review criteria requirements. Authorizations, continued-stay reviews, transfers/discharges, and adverse determination notices must follow these rules.
Carriers may not apply conflicting or more restrictive criteria; software decision tools are permitted only if they incorporate and apply the placement criteria with fidelity.
If a carrier's application of the placement criteria is not consistent with the level of care requested by the covered person or provider, the adverse benefit determination notice must include full details of the carrier's assessment under the relevant criteria.
Ensures carriers cannot apply more restrictive or conflicting criteria when conducting utilization review related to service intensity or level of care.
Use nonprofit professional association patient placement criteria for level-of-care decisions
Carriers must apply relevant age-appropriate patient placement criteria from nonprofit professional associations when conducting utilization reviews for service intensity or level-of-care placement and must authorize placement consistent with those criteria; carriers may not apply conflicting or more restrictive criteria. If a carrier's application of the placement criteria is inconsistent with the placement requested by the covered person or provider, any adverse benefit determination notice must include full details of the carrier's assessment under the relevant criteria. Carriers may only use additional patient placement criteria to approve requested services and may not rely on additional criteria to issue an adverse determination, deny, restrict, or limit access to requested services.
- Authorize placement at the service intensity and level of care consistent with relevant age-appropriate patient placement criteria from nonprofit professional associations.
- Do not apply conflicting or more restrictive patient placement criteria.
- If placement decisions differ from the request, include full assessment details in adverse benefit determination notices to the provider and covered person.
- Additional placement criteria may only be used to approve services, not to deny or restrict services.
Use age-appropriate nonprofit association placement criteria; comply with parity rules
For level-of-care placement and related utilization reviews, carriers must apply age-appropriate patient placement criteria from nonprofit professional associations and may not use additional criteria to issue adverse determinations; quantitative and nonquantitative treatment limitations must comply with federal parity rules.
- Apply relevant age-appropriate placement criteria from nonprofit professional associations for placement, continued stay, transfer, and discharge reviews.
- Do not adopt, impose, or enforce policy or provider agreement terms that undermine or conflict with these placement criteria requirements.
- Ensure quantitative and nonquantitative treatment limitations comply with 89 Fed. Reg. 77586 et seq. (federal parity requirements).
Covered Modalities and Visit Types
inv-23: Outpatient mental health and substance use disorder office visits — coverage criteria node
Covered outpatient visit criteria and utilization management exemptions:
Outpatient mental health office visits do not include procedures performed on an outpatient basis; visits remain subject to any plan quantitative treatment limits; referral or prescription requirements are permitted.
When PA involves drugs, identify alternatives and note appeal rights
For prior authorization requests that involve prescription drugs, carriers must indicate covered alternative prescription drugs and must treat authorization of a different drug than requested as an adverse benefit determination subject to the carrier's grievance and appeal process.
- API for prescription drugs must include information on covered alternative drugs (effective Jan 1, 2027).
- Authorization of a drug other than that requested is an adverse benefit determination and appealable.
Limits and Exemptions for Visits
Do not require utilization management for initial evaluation + up to 6 visits
A carrier may not require prior, concurrent, or postservice authorization for an initial evaluation and up to six treatment visits with a contracting provider in a new episode of care for outpatient mental health and outpatient substance use disorder office visits; these visits remain subject to any plan quantitative treatment limits.
- “New episode of care” is defined in statute (treatment for a new condition not treated by same licensed profession within previous 90 days and not currently undergoing active treatment).
Prohibition on PA for initial evaluation + up to six visits — operational impact
Health carriers may not require prior, concurrent, or postservice authorization for an initial evaluation and up to six treatment visits in a new episode of care for outpatient mental health or substance use disorder office visits; operationally, providers should not submit PA for these visits and carriers must not enforce PA requirements for them.
- Visits for which utilization management is prohibited cannot be denied or limited for medical necessity or appropriateness, nor retroactively denied or unpaid.
Denial risk if PA improperly required for exempt visits
If a carrier improperly requires prior authorization for visits exempt from utilization management (initial evaluation and up to six treatment visits in a new episode), denial or retroactive denial would conflict with the statute and may be disallowed; such denials are treated as adverse benefit determinations.
- Adverse determinations must follow grievance and appeal procedures.
Provider Requirements, Prior Authorization, and Appeals
PA decision timeframes and required prior‑authorization APIs (FHIR)
Carriers must decide and notify providers within specified calendar-day timeframes: electronic standard requests within 3 calendar days (requesting additional info within 1 day); electronic expedited within 1 calendar day; nonelectronic standard within 5 calendar days (requesting additional info within 5 days). Carriers must also build and maintain prior authorization APIs using HL7 FHIR standards with required functionality (determine whether PA is required, allow queries of documentation requirements, and exchange requests/determinations).
- Electronic PA decision: 3 calendar days; request for more info within 1 calendar day.
- Electronic expedited PA decision: 1 calendar day.
- Nonelectronic standard PA decision: 5 calendar days; request for more info within 5 calendar days.
- APIs must support HL7 FHIR per 45 C.F.R. §170.215 and automate PA requirement determination and documentation queries; interoperability for services begins Jan 1, 2025 and for prescription drugs Jan 1, 2027.
Post and provide PA standards/criteria on request
Health carriers shall post on their website and provide on request any prior authorization standards, criteria, or information used for medical necessity decisions to covered persons or contracting providers.
Providers may submit more records; carriers must forward records to reviewers
Providers may submit additional documentation in support of a determination; carriers must receive and forward any medical records or documents used in the determination and must provide requested documentation to the independent review organization within three business days of receipt of the review request.
- Carriers must include any documents used in making the determination and medical records relevant to the review when forwarding to the independent review organization.
Adverse determinations (including less‑intensive authorizations) trigger appeals
A prior authorization denial or an authorization of a service or drug less intensive or different than that requested is treated as an adverse benefit determination and is subject to the carrier's grievance and appeal process under RCW 48.43.535.
Codes and Billing Considerations
Policy Background and Scope
The law emphasizes that medical necessity determinations and utilization review for mental health and substance use disorder services must follow generally accepted standards of care and incorporate age‑appropriate patient placement criteria from recognized nonprofit professional associations. Carriers must apply those placement criteria for service intensity and level‑of‑care decisions and may not adopt or enforce terms that conflict with the statute. When a carrier applies criteria in a way that is inconsistent with a requested placement, the carrier must include full assessment details in any adverse benefit determination notice.
Document Changes and Effective Dates
Most provisions of the act become effective as of July 27, 2025.
Sections 1 through 8 of the act take effect for plans issued or renewed on or after January 1, 2027, triggering expanded definitions and applicability (including coverage classifications and prescription drug applicability).
OpenPayer is powered by Trek Health's payer performance platform. Trek continuously ingests, validates, and normalizes Transparency in Coverage data alongside payer policies and other commercial payer data to create a structured payer intelligence foundation. OpenPayer uses this foundation to deliver personalized search results, dynamically generated policy pages, and tailored policy monitoring based on each user's payers, specialties, billing codes, and areas of interest. The same intelligence powers broader payer performance workflows, including reimbursement benchmarking, contract evaluation, payer negotiations, and financial decision-making.