December 21, 2023

Here is the DFS Insurance Circular Letter re: reimbursement for school-based mental health services from commercial insurers
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Department of Financial Services

Insurance Circular Letter No. 9 (2023)

December 21, 2023

TO: All Insurers Authorized to Write Accident and Health Insurance in New York State, Article 43 Corporations, Health Maintenance Organizations, Student Health Plans Certified Pursuant to Insurance Law § 1124, Municipal Cooperative Health Benefit Plans, and Prepaid Health Services Plans

RE: Reimbursement for Treatment Provided by School-Based Mental Health Clinics

STATUTORY AND REGULATORY REFERENCES:  Insurance Law §§ 3216, 3221, and 4303; Mental Hygiene Law Article 31; Title 11 of Article 5 of the Social Services Law; and 14 NYCRR Part 599.

I. Purpose

The purpose of this circular letter is to provide guidance to insurers authorized to write accident and health insurance in this state, Article 43 corporations, health maintenance organizations, student health plans certified pursuant to Insurance Law § 1124, municipal cooperative health benefit plans, and prepaid health services plans (collectively, “issuers”) to facilitate compliance with the new requirements for comprehensive health insurance coverage related to reimbursement for covered outpatient care provided by school-based mental health clinics that are licensed pursuant to Mental Hygiene Law Article 31.1  This circular letter does not apply to Child Health Plus, Essential Plan, and Medicaid managed care coverage. 

II. Discussion

Subpart A of Part II of Chapter 57 of the Laws of 2023 (“Subpart A”) amended Insurance Law §§ 3216(i)(35), 3221(l)(5), and 4303(g) to require an issuer to provide reimbursement for covered outpatient care when provided by a school-based mental health clinic licensed pursuant to Mental Hygiene Law Article 31 at a pre-school, elementary school, or secondary school, regardless of whether the school-based mental health clinic furnishing such services is a participating provider with respect to such services.  The reimbursement requirement for outpatient care provided by a non-participating school-based mental health clinic licensed pursuant to Mental Hygiene Law Article 31 applies regardless of whether the policy or contract covers out-of-network services.  The law requires reimbursement for covered school-based mental health clinic services to be at the rate negotiated between the issuer and school-based mental health clinic or, in the absence of a negotiated rate, an amount no less than the rate that would be paid for such services pursuant to the medical assistance program under Title 11 of Article 5 of the Social Services Law (“Medicaid rate”).  Additionally, the law provides that payment by an issuer to the school-based mental health clinic is payment in full for the services provided.  Further, the school-based mental health clinic may not charge or seek any reimbursement from, or have any recourse against, an insured for the services provided, except for the collection of in-network copayments, coinsurance, or deductibles for which the insured is responsible under the terms of the policy or contract.  The amendments to the law made by Subpart A take effect January 1, 2024, and apply to policies and contracts issued, renewed, amended, modified, or altered on or after such date.

As noted above, reimbursement for such covered care must be either at the rate negotiated with the provider or, in the absence of a negotiated rate, an amount no less than the Medicaid rate.  Under Medicaid, reimbursement to school-based mental health clinics for covered outpatient care is generally calculated using the Ambulatory Patient Groups (“APG”) payment methodology, which is based on a classification system.2  The New York State Department of Health maintains information on the APG payment methodology on its website.

Information related to locations of school-based mental health clinics, fee schedules for all services and service combinations provided by school-based mental health clinics, instructions for the school-based mental health clinics procedure-based fee schedule, and the Current Procedural Terminology Revenue Calculator, which allows issuers to calculate claims payments based on different services or service combinations provided on a single claim, can be accessed on the Office of Mental Health’s website.

III. Conclusion

For comprehensive health insurance policies and contracts issued, renewed, amended, modified, or altered on or after January 1, 2024, issuers must provide reimbursement for covered outpatient care when provided by a school-based mental health clinic licensed pursuant to Mental Hygiene Law Article 31 at a pre-school, elementary school, or secondary school, regardless of whether the school-based mental health clinic furnishing such services is a participating provider with respect to such services.  Such reimbursement must be at either the negotiated rate or a rate that is no less than the Medicaid rate. 

Please direct any questions regarding this circular letter to the Health Bureau by email at health@dfs.ny.gov.

Very truly yours,
 

Lisette Johnson
Bureau Chief, Health Bureau