Requires prescription drug coverage for serious mental illness without prior authorization or utilization management, including step therapy.

A4694

ASSEMBLY, No. 4694

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED MARCH 16, 2026

Sponsored by:

Assemblywoman� ELIANA PINTOR MARIN

District 29 (Essex and Hudson)

Assemblyman� STERLEY S. STANLEY

District 18 (Middlesex)

Assemblywoman� SHANIQUE SPEIGHT

District 29 (Essex and Hudson)

Co-Sponsored by:

Assemblyman Venezia, Assemblywomen Donlon, Peterpaul,
Assemblymen Schnall, Sampson and Assemblywoman Haider

SYNOPSIS

���� Requires prescription drug coverage for serious
mental illness without prior authorization or utilization management, including
step therapy.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
concerning utilization management, amending P.L.2019,
c.58, and supplementing P.L.1968, c.413 (30:4D-1 et seq.).

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

����� 1.�� Section
11 of P.L.2019, c.58 (C.26:2S-10.8) is amended to read as follows:

����� 11.�
a.� For the purposes of this section:

����� "Benefit
limits" includes both quantitative treatment limitations and
non-quantitative treatment limitations.

����� "Carrier"
means an insurance company, health service corporation, hospital service
corporation, medical service corporation, or health maintenance organization
authorized to issue health benefits plans in this State or any entity
contracted to administer health benefits in connection with the State Health
Benefits Program or School Employees' Health Benefits Program.

����� "Classification
of benefits" means the classifications of benefits found at 45 C.F.R.
146.136(c)(2)(ii)(A) and 45 C.F.R. s.146.136(c)(3)(iii).

����� "Department"
means the Department of Banking and Insurance.

"Mental
health condition" means a condition defined to be consistent with
generally recognized independent standards of current medical practice
referenced in the current version of the Diagnostic and Statistical Manual of
Mental Disorders.

����� "Non-quantitative
treatment limitations" or "NQTL" means processes, strategies, or
evidentiary standards, or other factors that are not expressed numerically, but
otherwise limit the scope or duration of benefits for treatment. NQTLs shall
include, but shall not be limited to:

����� (1)� Medical
management standards limiting or excluding benefits based on medical necessity
or medical appropriateness, or based on whether the treatment is experimental
or investigative;

����� (2)� Formulary
design for prescription drugs;

����� (3)� For
plans with multiple network tiers, such as preferred providers and
participating providers, network tier design;

����� (4)� Standards
for provider admission to participate in a network, including reimbursement
rates;

����� (5)� Plan
methods for determining usual, customary, and reasonable charges;

����� (6)� Refusal
to pay for higher-cost therapies until it can be shown that a lower-cost
therapy is not effective, also known as fail-first policies or step therapy
protocols;

����� (7)� Exclusions
based on failure to complete a course of treatment;

����� (8)� Restrictions
based on geographic location, facility type, provider specialty, and other
criteria that limit the scope or duration of benefits for services provided
under the plan or coverage;

����� (9)� In
and out-of-network geographic limitations;

����� (10)�
Limitations on inpatient services for situations where the participant is a
threat to self or others;

����� (11)�
Exclusions for court-ordered and involuntary holds;

����� (12)�
Experimental treatment limitations;

����� (13)�
Service coding;

����� (14)�
Exclusions for services provided by a licensed professional who provides mental
health condition or substance use disorder services;

����� (15)�
Network adequacy; and

����� (16)�
Provider reimbursement rates.

�����
�Serious
mental illness� means the following psychiatric illnesses as defined in the
most current version of the Diagnostic and Statistical Manual of Mental
Disorders:

�����
(1)� schizophrenia,
schizo-affective disorders including bipolar and depressive, and bipolar
disorders including hypomanic, manic, depressive, and mixed;

�����
(2)
major depressive disorders, whether a single episode or recurrent, including,
but not limited to, any major depressive disorder with peripartum onset; and

�����
(3)
post-traumatic stress disorder.

����� "Substance
use disorder" means a disorder defined to be consistent with generally
recognized independent standards of current medical practice referenced in the
most current version of the Diagnostic and Statistical Manual of Mental
Disorders.

����� b.�� A
carrier shall approve a request for an in-plan exception if the carrier's
network does not have any providers who are qualified, accessible and available
to perform the specific medically necessary service. A carrier shall
communicate the availability of in-plan exceptions:

����� (1)� on
its website where lists of network providers are displayed; and

����� (2)� to
beneficiaries when they call the carrier to inquire about network providers.

����� c.�� A
carrier that provides hospital or medical expense benefits through individual
or group contracts shall submit an annual report to the department on or before
March 1. The annual report shall contain, to the extent that the commissioner
determines practicable, the following information:

����� (1)� A
description of the process used to develop or select the medical necessity
criteria for mental health benefits, the process used to develop or select the
medical necessity criteria for substance use disorder benefits, and the process
used to develop or select the medical necessity criteria for medical and
surgical benefits;

����� (2)� Identification
of all NQTLs that are applied to mental health benefits, all NQTLs that are
applied to substance use disorder benefits, and all NQTLs that are applied to
medical and surgical benefits, including, but not limited to, those listed in
subsection a. of this section;

����� (3)� The
results of an analysis that demonstrates that for the medical necessity
criteria described in paragraph (1) of this subsection and for selected NQTLs
identified in paragraph (2) of this subsection, as written and in operation,
the processes, strategies, evidentiary standards, or other factors used to
apply the medical necessity criteria and selected NQTLs to mental health
condition and substance use disorder benefits are comparable to, and are no
more stringently applied than the processes, strategies, evidentiary standards,
or other factors used to apply the medical necessity criteria and selected
NQTLs, as written and in operation, to medical and surgical benefits. A
determination of which selected NQTLs require analysis will be determined by
the department; at a minimum, the results of the analysis shall entail the
following, provided that some NQTLs may not necessitate all of the steps
described below:

����� (a)� identify
the factors used to determine that an NQTL will apply to a benefit, including
factors that were considered but rejected;

����� (b)� identify
and define the specific evidentiary standards, if applicable, used to define
the factors and any other evidentiary standards relied upon in designing each
NQTL;

����� (c)� provide
the comparative analyses, including the results of the analyses, performed to
determine that the processes and strategies used to design each NQTL, as
written, for mental health and substance use disorder benefits are comparable
to and applied no more stringently than the processes and strategies used to
design each NQTL as written for medical and surgical benefits;

����� (d) provide
the comparative analyses, including the results of the analyses, performed to
determine that the processes and strategies used to apply each NQTL, in
operation, for mental health and substance use disorder benefits are comparable
to and applied no more stringently than the processes or strategies used to
apply each NQTL in operation for medical and surgical benefits; and

����� (e)� disclose
the specific findings and conclusions reached by the carrier that the results
of the analyses above indicate that the carrier is in compliance with this
section and the Paul Wellstone and Pete Domenici Mental Health Parity and
Addiction Equity Act of 2008, 42 U.S.C. s.18031(j), and its implementing and
related regulations, which includes 45 C.F.R. s.146.136, 45 C.F.R. s.147.160,
and 45 C.F.R. s.156.115(a)(3); and

����� (4)� Any
other information necessary to clarify data provided in accordance with this
section requested by the Commissioner of Banking and Insurance including
information that may be proprietary or have commercial value, provided that no
proprietary information shall be made publicly available by the department.

����� d.�� The
department shall implement and enforce applicable provisions of the Paul
Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of
2008, 42 U.S.C. 18031(j), any amendments to, and federal guidance or
regulations issued under that act, including 45 C.F.R. Parts 146 and 147, 45
C.F.R. s.156.115(a)(3), P.L.1999, c.106 (C.17:48-6v et al.), and section 2 of
P.L.1999, c.441 (C.52:14-17.29e), which includes:

����� (1)� Ensuring
compliance by individual and group contracts, policies, plans, or enrollee
agreements delivered, issued, executed, or renewed in this State pursuant to
P.L.1938, c.366 (C.17:48-1 et seq.), P.L.1940, c.74 (C.17:48A-1 et seq.),
P.L.1985, c.236 (C.17:48E-1 et seq.), chapter 26 of Title 17B of the New Jersey
Statutes (N.J.S.17B:26-1 et seq.), chapter 27 of Title 17B of the New Jersey
Statutes (N.J.S.17B:27-26 et seq.), P.L.1992, c.161 (C.17B:27A-2 et seq.),
P.L.1992, c.162 (C.17B:27A-17 et seq.), P.L.1973, c.337 (C.26:2J-1 et seq.),
and P.L.1961, c.49 (C.52:14-17.25 et seq.), or approved for issuance or renewal
in this State by the Commissioner of Banking and Insurance.

����� (2)� Detecting
violations of the law by individual and group contracts, policies, plans, or
enrollee agreements delivered, issued, executed, or renewed in this State
pursuant to P.L.1938, c.366 (C.17:48-1 et seq.), P.L.1940, c.74 (C.17:48A-1 et
seq.), P.L.1985, c.236 (C.17:48E-1 et seq.), chapter 26 of Title 17B of the New
Jersey Statutes (N.J.S.17B:26-1 et seq.), chapter 27 of Title 17B of the New
Jersey Statutes (N.J.S.17B:27-26 et seq.), P.L.1992, c.161 (C.17B:27A-2 et
seq.), P.L.1992, c.162 (C.17B:27A-17 et seq.), P.L.1973, c.337 (C.26:2J-1 et
seq.), and P.L.1961, c.49 (C.52:14-17.25 et seq.), or approved for issuance or
renewal in this State by the Commissioner of Banking and Insurance.

����� (3)� Accepting,
evaluating, and responding to complaints regarding violations.

����� (4)� Maintaining
and regularly reviewing for possible parity violations a publicly available
consumer complaint log regarding mental health condition and substance use
disorder coverage, provided that the names of specific carriers will be
redacted and not disclosed on the complaint log.

����� (5)� The
commissioner shall adopt rules as may be necessary to effectuate any provisions
of this section and the Paul Wellstone and Pete Domenici Mental Health Parity
and Addiction Equity Act of 2008 that relate to the business of insurance.

����� e.�� Not
later than May 1 of each year, the department shall issue a report to the
Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1). The report
shall:

����� (1)� Describe
the methodology the department is using to check for compliance with the Paul
Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of
2008, 42 U.S.C s.18031(j), and any federal regulations or guidance relating to
the compliance and oversight of that act.

����� (2)� Describe
the methodology the department is using to check for compliance with P.L.1999,
c.106 (C.17:48-6v et al.) and section 2 of P.L.1999, c.441 (C.52:14-17.29e).

����� (3)� Identify
market conduct examinations conducted or completed during the preceding
12-month period regarding compliance with parity in mental health and substance
use disorder benefits under state and federal laws and summarize the results of
such market conduct examinations. This shall include:

����� (a)� The
number of market conduct examinations initiated and completed;

����� (b)� The
benefit classifications examined by each market conduct examination;

����� (c)� The
subject matters of each market conduct examination, including quantitative and
non-quantitative treatment limitations;

����� (d) A
summary of the basis for the final decision rendered in each market conduct
examination; and

����� (e)� Individually
identifiable information shall be excluded from the reports consistent with
state and Federal privacy protections.

����� (4)� Detail
any educational or corrective actions the department has taken to ensure
compliance with Paul Wellstone and Pete Domenici Mental Health Parity and
Addiction Equity Act of 2008, 42 U.S.C s.18031(j), P.L.1999, c.106 (C.17:48-6v
et al.) and section 2 of P.L.1999, c.441 (C.52:14-17.29e).

����� (5)� Detail
the department's educational approaches relating to informing the public about
mental health condition and substance use disorder parity protections under
State and federal law.

����� (6)� Be
written in non-technical, readily understandable language and shall be made
available to the public by, among such other means as the department finds
appropriate, posting the report on the department's website.

����� f.��� The
department shall post on its Internet website a report disclosing the
department's conclusions as to whether the analyses collected from the carriers
as specified in paragraph (3) of subsection c. of this section demonstrate
compliance with the Mental Health Parity and Addiction Equity Act of 2008 and
its implementing regulations, specifically including whether or not there is
compliance with 45 C.F.R. 146.136(c)(4). The name and identity of carriers
shall be confidential, shall not be made public by the department, and shall
not be subject to public inspection.

����
g.
(1)
A carrier shall provide coverage for a
prescription drug prescribed for serious mental illness to covered persons
without the imposition of any prior authorization or other utilization
management requirements, including, but not limited to, a step therapy protocol
, if the prescriber is:

����
(a)��
a
psychiatrist; or

����
(b)�� an
obstetrician/gynecologist, during the postpartum period.
�

����
(2)�� If a person has been
stable and appropriately treated for a serious mental illness using a drug
prescribed by a psychiatrist or an obstetrician/gynecologist for a period of
six months, another prescriber may continue prescribing that drug without the
imposition of any prior authorization or other utilization management
requirements.

�����
(3) The provisions of this
subsection shall only apply to persons who are 18 years of age or older
.

(cf:
P.L.2019, c.58, s.11)

���� 2.��� (New section)� a.
(1)
Notwithstanding the provisions of any
law, rule, or regulation to the contrary, the division shall provide coverage
for prescription drugs to treat serious mental illness under the Medicaid
program and the NJ FamilyCare program without the imposition of any prior
authorization or other utilization management requirements, including, but not
limited to, a step therapy protocol, provided that the prescription drug is
prescribed to an enrollee by a licensed medical practitioner who is authorized
to prescribe that treatment pursuant to State and federal law
, if the prescriber is:

���� (a)��
a
psychiatrist; or

���� (b)�� an
obstetrician/gynecologist, during the postpartum period.�

���� (2)�� If an enrollee has been
stable and appropriately treated for a serious mental illness using a drug
prescribed by a psychiatrist or an obstetrician/gynecologist for a period of
six months, another prescriber may continue prescribing that drug without the imposition
of any prior authorization or other utilization management requirements.

����� (3)� The provisions of this
subsection shall only apply to enrollees who are 18 years of age or older
.

���� b.��� The division shall
require each managed care organization contracted with the division to provide
pharmacy benefits to Medicaid and NJ FamilyCare enrollees to comply with the
provisions of this section.

���� c.���� As used in this
section:

���� �Division� means the Division
of Medical Assistance and Health Services in the Department of Human Services.

���� �Medicaid program� means the
program established pursuant to P.L.1968, c.413 (C.30:4D-1 et seq.).

���� �NJ FamilyCare program� means
the program established pursuant to P.L.2005, c.156 (C.30:4J-8 et al.).

���� �Serious mental illness� means
the following psychiatric illnesses as defined in the most current version of
the Diagnostic and Statistical Manual of Mental Disorders:

���� (1)�� bipolar disorders
including hypomanic, manic, depressive, and mixed;

���� (2)�� depression in childhood
and adolescence;

���� (3)�� major depressive
disorders, whether a single episode or recurrent
, including, but not limited to, any major depressive disorder with
peripartum onset
;

���� (4)�� obsessive compulsive
disorders;

���� (5)�� paranoid and other
psychotic disorders;

���� (6)�� schizo-affective
disorders including bipolar and depressive;

���� (7)�� schizophrenia
; and

���� (8)�� post-traumatic
stress disorder
.

���� 3.��� This act shall take
effect on the 180th day next following the date of enactment and shall apply to
policies issued or renewed on or after that effective date.

STATEMENT

���� This bill requires health
insurance carriers and the State Medicaid and NJ FamilyCare programs to provide
coverage for a prescription drug prescribed for serious mental illness to
covered persons without the imposition of any prior authorization or other
utilization management requirements, including, but not limited to, a step
therapy protocol.

���� Under the bill, �carrier"
is defined to mean an insurance company, health service corporation, hospital
service corporation, medical service corporation, or health maintenance
organization authorized to issue health benefits plans in this State or any
entity contracted to administer health benefits in connection with the State
Health Benefits Program or School Employees' Health Benefits Program.

���� The bill defines �serious
mental illness� to mean the following psychiatric illnesses, as defined in the
most current version of the Diagnostic and Statistical Manual of Mental
Disorders:

���� (1)�� schizophrenia,
schizo-affective disorders including bipolar and depressive, and bipolar
disorders including hypomanic, manic, depressive, and mixed;

���� (2)�� major depressive
disorders, whether a single episode or recurrent, including, but not limited
to, any major depressive disorder with peripartum onset; and

���� (3)�� post-traumatic stress
disorder.

���� This bill provides that
coverage for drugs prescribed for serious mental illness to covered persons
without prior authorization or utilization management is only required if the
drug is prescribed by a psychiatrist or an obstetrician/gynecologist, during
the postpartum period.

���� This bill also provides that
if a person has been stable and appropriately treated for a serious mental
illness using a drug prescribed by a psychiatrist or an
obstetrician/gynecologist for a period of six months, another prescriber may
continue prescribing that drug without prior authorization or utilization
management requirements.

���� This bill also provides that
the requirement for coverage for drugs for serious mental illness without prior
authorization or utilization management only applies to persons who are 18
years of age or older.