2010 Tennessee Code
Title 56 - Insurance
Chapter 7 - Policies and Policyholders
Part 26 - Mandated Offerings of Coverage
56-7-2601 - Health insurance Coverage of mental illness.

56-7-2601. Health insurance Coverage of mental illness.

(a)  As used in this section:

     (1)  “Annual limit” means a dollar limitation on the total amount that may be paid for benefits in a twelve-month period under a health plan with respect to an individual or other coverage unit;

     (2)  “Annual limit” means a dollar limitation on the total amount that may be paid for benefits in a twelve-month period under a health plan with respect to an individual or other coverage unit;

     (3)  “Clinical staff” means an individual on the community mental health center staff who performs as a part of the treatment team diagnostic and/or counseling services and who holds at least a master's degree in either of the disciplines of psychology, nursing, or social work and any required license; and

     (4)  “Community mental health center” means a private entity qualified as a tax exempt organization under § 501(c)(3) of the Internal Revenue Code , codified in 26 U.S.C. § 501(c)(3), or a public entity created by private act of the general assembly that:

          (A)  Is primarily engaged in providing services for the diagnosis and treatment of emotionally disturbed and mentally ill persons, has a requirement that all mental health care be under a treatment plan approved and reviewed by a licensed physician or a licensed psychologist designated as a health care service provider, and has appropriate arrangements to assure that patients requiring medical services can be referred to a physician or hospital; and

          (B)  Has been licensed as a mental health clinic facility by the department of mental health and developmental disabilities, or by the licensing board of the state in which the community mental health center is located.

(b)  All other laws of this state notwithstanding, any individual, franchise, blanket or group policy of insurance issued pursuant to this title that provides hospital expense and surgical expense insurance and that is entered into, delivered, issued for delivery, or renewed, excepting individual insurance policy renewal, by agreement or otherwise, commencing on July 1, 1974, shall provide benefits for expense of residents of this state covered under the policy or plan, arising from psychiatric disorders, mental or nervous conditions, as described and defined in the Diagnostic Standard Manual of the American Psychiatric Association, alcoholism, drug dependence, both defined as mental illness in § 33-1-101, or the medical complication of mental illness or mental retardation, unless the policy or plan of insurance specifically excludes or reduces these benefits. This subsection (b) shall not apply to group policies or plans to which § 56-7-2360 applies. The medical and hospital benefits and coverage provided for the disorders, conditions and complications, if any, shall not be denied because of confinement in a particular facility; provided, that the facility is either:

     (1)  A hospital licensed under title 33, chapter 2 or title 68, chapter 11, part 2, and accredited by the joint commission on the accreditation of hospitals; or

     (2)  A hospital owned or operated by the state that is especially intended for use in the diagnosis, care and treatment of psychiatric, mental or nervous disorders, nor shall the benefits and coverage be denied on the basis that physician's services were performed by physicians not on the staff of a particular facility, so long as those services were rendered while insureds were hospitalized in that facility.

(c)  (1)  After July 1, 1980, every insurer that proposes to issue a group hospital policy or a group major medical policy in this state and every nonprofit hospital and medical service plan corporation that proposes to issue group hospital, medical or major medical service plan contracts that provide coverage for the insured or the subscriber shall, in the case of outpatient expenses at a community mental health center, make available benefits as specified in this section for the care and treatment of mental, emotional or nervous disorders, alcoholism, drug dependence or the medical complication of mental illness or mental retardation.

     (2)  The benefits required to be made available by this subsection (c) shall be a part of each group policy or group contract described in this section, unless the policyholder or group contract subscriber rejects in writing the coverage.

     (3)  When benefits as specified in this section are made available for treatment received at the community mental health center, the benefits that cover services rendered by a physician in accordance with the policy or service plan contract shall also be made available when services are rendered by a member of the clinical staff, so long as the community mental health center has in effect a plan for quality assurance approved by the department of mental health and developmental disabilities and the treatment is supervised by a licensed physician or a licensed psychologist designated as a health service provider. However, nothing in this subsection (c) may be construed to affect the license of a physician or psychologist designated as a health service provider providing the service or supervision. The benefits shall be provided at the usual and customary rates established by the community mental health center for the services rendered. However, the benefits provided shall be subject to deductibles and coinsurance factors that are not less favorable than for physical illness generally, and in no event shall coverage be required to be made available for more than thirty (30) outpatient visits per year.

(d)  With respect to policies and contracts as described in subsection (c) that are delivered or issued for delivery in this state on or before July 1, 1980, each insurer and nonprofit hospital and medical service plan corporation shall notify the group policyholder or group contract holder of the availability of coverage described in subsection (c). The notification shall describe the benefits available and shall provide a means by which the policyholder or group contract holder may communicate acceptance or rejection of the coverage.

(e)  All group hospital and major medical policies delivered or issued for delivery in this state after July 1, 1980, and all group hospital, medical and major medical service plans commencing in this state after July 1, 1980, that provide benefits for expenses of residents of the state arising from psychiatric disorders, mental or nervous conditions, alcoholism, drug dependence or medical complication of mental illness or mental retardation, shall reimburse for these benefits, if any, when the benefits are provided at a facility that is:

     (1)  With respect to outpatient benefit, a community mental health center, or

     (2)  With respect to inpatient benefits, a community mental health center that has facilities for inpatient care and that has received a certificate of need from the Tennessee health facilities commission certifying the necessity of the facility if required by law.

(f)  All individual, franchise, blanket, or group policies of insurance issued pursuant to this title that provide hospital expense and medical or surgical expense insurance and that are entered into, delivered, issued for delivery, or renewed, except individual insurance policy renewal, by agreement or otherwise, commencing on July 1, 1981, and that provide benefits for expenses of residents of the state arising from alcoholism, drug dependence or medical complication resulting from alcoholism, or drug dependence shall reimburse for these benefits, if any, when the benefits are provided at a facility that is a residential treatment facility licensed under title 33, chapter 2, part 4, and accredited by the joint commission on the accreditation of hospitals.

(g)  Subject to § 56-7-2360, in general, with respect to group health plans issued by entities regulated pursuant to insurance law, for plan years beginning on or after January 1, 1998, certain mental health benefits are required as follows:

     (1)  As to either aggregate lifetime limits or annual limits or both, for a group health plan providing both medical and surgical benefits and mental health benefits:

          (A)  If the plan does not have a limit on substantially all medical and surgical benefits, the plan may not impose such a limit on mental health benefits;

          (B)  If the plan has a limit on substantially all medical and surgical benefits, the plan shall either include mental health benefits under the limit applied to medical and surgical benefits or apply a separate limit to mental health benefits that is no less than the one applied to medical and surgical benefits; and

          (C)  If the plan has varying limits on different medical or surgical benefits, the plan shall apply an average limit to mental health benefits with the average to be computed based on the weighted average of the varying limits;

     (2)  No group health plan is required under this subsection (g) to provide mental health benefits;

     (3)  This subsection (g) shall not affect the terms and conditions related to the amount, duration or scope of mental health benefits except for aggregate lifetime limits and annual limits;

     (4)  This subsection (g) shall not apply to group health plans issued to small employers, defined as those with from two (2) to fifty (50) employees;

     (5)  This subsection (g) shall not apply if its application results in an increase in the cost of the coverage of at least one percent (1%);

     (6)  If the group health plan offers a participant two (2) or more benefit package options, this subsection (g) shall be applied separately to each option;

     (7)  For purposes of this subsection (g), “mental health benefits” does not include benefits for the treatment of substance abuse or chemical dependency;

     (8)  This subsection (g) shall not apply to benefits for services furnished on or after September 30, 2001; and

     (9)  The commissioner may promulgate reasonable rules and regulations necessary for the proper administration of this subsection (g).

[Acts 1974, ch. 482, § 1; 1979, ch. 252, § 1; T.C.A., § 56-1167; Acts 1980, ch. 570, §§ 1, 2; 1981, ch. 285, §§ 1, 2; 1982, ch. 821, § 1; 1984, ch. 946, §§ 1, 2; 1992, ch. 984, § 4; 1992, ch. 991, §§ 20, 21; T.C.A., § 56-7-1003; Acts 1997, ch. 157, § 17; 1998, ch. 1042, §§ 2, 3; 2000, ch. 947, §§ 6, 8F, 8L.]  
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