Pictured above (on the monitor):   California State Senator Dave Cortese introducing SB 999 to the State Senate one year ago.

Below is the story of SB 999.  VERY IMPORTANT – please share this post with everyone you know who provides quality mental health and substance abuse treatment in California and beyond.

In August 2014 the Ninth Circuit (Southern California) Federal Court concluded United Behavioral Health had abused “the discretion with which it had been entrusted” because its medical staff “rubber stamped” a denial of mental health treatment written by Wisconsin psychiatrist Dr. Barbara Center “as an ostensibly independent evaluator who made critical factual errors.”   The California patient who was denied treatment because of Dr. Center’s irresponsible denial suffered from severe anorexia nervosa.

Dr. Center, who is the Medical Director of the Wisconsin-based “Prest & Associates” is notorious in California.  Both Cigna and Anthem regularly hire her, and the doctors who work under her, to do peer-to-peer reviews as “external” doctors.  Their denials are then upheld by “internal” doctors.  Since November 2021 Dr. Center has had a 97% denial rate among the 38 California treatment centers who keep score.   Other Prest doctors have 100% denial rates.

Later that same year CBS-TV’s award-winning news magazine “60 Minute” outed Dr. Tim

Jack, a psychiatrist, paid by Anthem of CA to do peer-to-peer reviews.  “60 Minutes” followed the case of a California patient he denied, a 14 year old with bulimia rooted in major depression.  In fact, she met medical necessity criteria and needed the additional days of care.

.60 Minutes producer Scott Pelley stated: “Insurance doctors are paid by the case. Dr. Jack is a contractor who gets $45 per patient. In court records, Dr. Jack says he does 550 reviews a month. So, working from home, that comes to $25,000 a month. We spoke to 26 psychiatrists from across the country, and everyone brought up Dr. Jack's name.  We found Dr. Jack's denial rate averaged 92 percent in one six-month period in 2011. But that was typical among 11 reviewers contracted by Anthem. Some of them had denial rates of 95 and 100 percent.”

I remember “Dr. No” from the time I served as CEO and co-owner of Malibu Beach Recovery Center, a treatment facility I had co-founded.  He favored outpatient treatment which is significantly less expensive than inpatient treatment. According to my notes, two of his most outrageous denials of residential care involved: (a)   An alcoholic who got drunk, took a gun from his father’s desk drawer, and shot up the LA suburb of Brentwood.  We were told to send him straight to outpatient treatment.  (b)  A bath salts addict, at a time when such addicts were cannibalizing the homeless.  We were told to send him straight to outpatient treatment.

ASAM criteria had not yet been mandated by California law, in 2014 there was no way

to fight the lawless decisions of psychiatrists like Dr. Center and Dr. Jack who were unqualified to practice mental health and addiction medicine.

Then on January 1, 2021, to the relief of the California addiction and mental health

communities, SB 855 (Wiener) became law.  It is currently the most comprehensive mental health parity law in the country, prohibiting limiting mental health and substance abuse services to short term or acute treatment.  It expanded the mental health and substance use disorders required to be covered by plans and policies and placed additional requirements on them.

Five days after SB 855 became law, the DMHC together with DOI sent to health plan representatives “APL 21-002 – SB 855 coverage and Attachment A Criteria” which stated clearly that the only criteria for “medical necessity” (length of stay and level of care) for substance abuse disorder patients would be the criteria developed over the years by the American Society of Addiction Medicine (“ASAM”).   For mental health patients the criteria would be Locus.

To our surprise, the denials continued apace, month after month, by the same unqualified doctors, none of who used ASAM or Locus, or if they did, they “fudged” the results to look legal assuming the patient would not appeal and no legitimate addiction or mental health doctor would file a complaint.   The famous Dr. Center is still denying needed medically necessary treatment, to the detriment of California residents suffering from what ASAM defines as “a treatable chronic brain disease involving complex interactions among brain circuits, genetics, the environment and an individual’s life experiences.”

In June 2021, we approached Senator Cortese about authoring SB 999, a bill designed to amend SB 855 and add a requirement that insurance companies hire qualified addiction doctors instead of using child psychiatrists, geriatric psychiatrists, family doctors, and general psychiatrists.   

To support SB 999, on 11/1/21 Summit Estate Recovery Center together with billing companies Hansei Solutions and Billing Solutions began collectively keeping score as proof that SB 999 was needed because the “stringent new requirements” of SB 855 were not being met.

The Scoreboard, now 16 months old, demonstrates that during this time not one of the 76 doctors hired by insurance companies (mostly Anthem) to do peer-to-peer reviews for addiction patients whose plans are regulated were ASAM accredited, or made their decisions based on ASAM criteria.

The Prest “external” doctors, like Dr. Center, have denial rates ranging from 75%-100%.  The main Anthem “internal” doctors have denial rates ranging from 79%-100%.  MSN doctors deny 82%-88% of the time.  There are other doctors with lower denial rates, but they are assigned very few peer-to-peer reviews.

In 2023, at the recommendation of the Kennedy Forum, Summit began filing Independent Medical Reviews(“IMR”) with DMHC and DOI in an effort to overturn the illegal denials by unqualified doctors.  To date Summit has won 100% of them.  According to Bloomberg News, since SB 855 became law, 66% of the IMRs filed for illegal denials of mental health and substance abuse were overturned.

Members of the State Senate and Assembly Health and Appropriations Committees understood and passed SB 999, over the loud objections of the Insurance Lobby and three DMHC lawyers who supported the Lobby (our then lobbyist had to remind them during our meeting, also attended by a representative of Senator Cortese, they were reading word for word from an Anthem opposition document).

The objections were not credible and did not take into consideration the damage being done to substance abuse and mental health patients by the insurance companies which regularly hire unqualified doctors to determine length of stay and level of care.

Here is an example:  Although there are 6,000 ASAM credentialed doctors in the United States, carriers such as Anthem, Cigna, UBH and Aetna continue to use the same psychiatrists, psychiatrists specializing in adolescent psych, osteopaths and occasionally family doctors to deny treatment. Their denials are not based on ASAM (or Locus) criteria.

The very first objections of the insurance lobby to SB 999 begin with the erroneous assertion that:   SB 999 would create an arduous new process which would substantially limit who is allowed to conduct utilization reviews…Existing law is clear that ONLY a licensed physician or a licensed healthcare professional who is competent to evaluate the specific clinical issues involved in health care services requested by the provider, may deny or modify requests for authorization based on medical necessity.

SB 999 then passed the full Senate and Assembly.   When it reached the governor’s desk on September 25, 2022 it was vetoed!!!.

Governor Newsom wrote.  “Implementation of SB 855 [which had become law 21 months earlier] is underway, and the industry is in the process of adapting to California's stringent new requirements. As such, this bill is premature and unnecessary at this time.

More than eight months have now passed since the veto.  Denials continue apace.

In the interim, on March 25, 2023, ProPublica published an explosive expose headlined: “Internal documents and former company executives reveal how Cigna doctors reject patients’ claims without opening their files. “We literally click and submit,” one former company doctor said.

During these months the DOI published its revised draft regulations, had a hearing, and then let us know that their final regs would be in keeping with tenets of SB 999.  A DOI lawyer has also confirmed that it would be technically possible to add several lines to each IMR application where the names of the doctors who had denied or upheld a denial was listed.  Each quarter the DOI could run the statistics and review how many times the IMRs had overturned a doctor’s denials of treatment not based on ASAM criteria.  Measures could then be taken to stop doctors who regularly overturned from doing additional peer-to-peer reviews.

The DMHC published their second set of draft regulations in late 2022.  In January, Summit replied citing much of the above.  On April 4, 2023, they wrote: “We are still in the rulemaking process, and all comments received during the initial 45-day comment period are being considered.”  I was told by someone involved that they will probably, based on comments, publish another series of draft regulations that will finalize at the end of 2023.

As of now DMHC has not publicly taken a position on ending the practice of incentivizing unqualified doctors to deny, keeping score of how often these doctors deny through IMR process, and establishing professional standards for peer-to-peer reviews and utilization reviews.

The above makes me nervous so on April 13, 2023 Senator Cortese staffer Hla ElKhatib and I met by zoom with Governor Newsom’s Deputy Legislative.  She knew nothing about SB 999 but agreed to review the detailed report I had prepared.  She said she would be calling DMHC and getting back to us.  This has not happened.

Why?  Why is it that almost 2-1/2 years after SB 855 and ASAM criteria became California law, health insurance carriers regulated by the State of California are still being allowed to incentivize unqualified doctors from Prest & Associates, Anthem, Cigna and UBH to deny length of stay and level of care in violation of our legal standards.  There are 6,000 ASAM certified doctors in the US they could hire to do peer-to-peer reviews.

Who is currently benefiting from SB 855?  Not the patients.

Perhaps it is time for Senator Cortese to bring SB 999 again.

If you are a treatment center and would like help filing Independent Medical Reviews to overturn illegal denials, please contact me.

Please follow this link to the underlying documents I have referenced in the above letter.