State laws on medical-necessity criteria for mental health and substance use care

Does a state criteria law reach this patient's plan?

Only if the state regulates the plan. State insurance laws generally bind insurers and the policies they issue, while self-funded employer plans under ERISA generally fall outside them. Check the plan type before citing any law below, because a correct citation to a law that does not reach the plan adds nothing to the appeal.

ERISA saves state insurance laws but says a covered plan is not itself deemed an insurer (29 U.S.C. 1144(b)(2)). In general terms, an insurance law can shape an insured plan through its policy but does not bind a self-funded plan. KFF's 2026 survey of employers with ten or more workers found 71% of covered workers, and 85% at firms with 200 or more workers, in self-funded plans (KFF).

• Summary plan description (SPD): federal rules require it to say whether and to what extent benefits are guaranteed under an insurance policy (29 CFR 2520.102-3(q)).
• The employer's benefits office: ask if the plan is fully insured or self-funded. An insurer's name on the card may mean only that it administers claims.
• ID card or member services: New Jersey's regulator says cards issued there must state which it is (Bulletin 17-05); other states may differ.

Which states control the criteria insurers use for mental health and substance use reviews?

At least eleven do, in different ways. The table lists each law read in statute, regulation or enacted bill text on October 31, 2026, with its citation, requirement, named criteria, plans reached and any confirmed effective date. Absence from this table says nothing about a state, and the list is not exhaustive.

Which state's law applies when the plan, employer and patient are in different states?

Often the state where the policy was issued, not where the patient is treated. Maryland's law covers plans delivered or issued for delivery in Maryland, and New Jersey's regulator says out-of-state plans are not subject to its law. New York's tool rule differs: state guidance applies it to care provided in New York. Check the certificate of coverage.

Do these laws name a tool, point to nonprofit associations, or set a general standard?

All three appear. Some laws name a tool, usually ASAM for substance use. Some require criteria from nonprofit associations without naming one. Georgia and Virginia define medical necessity and generally accepted standards. New York relies on state agencies. A state-law argument should match the form the statute actually takes, because the forms ask different questions.

None of the eleven texts names LOCUS or CALOCUS, so whether either satisfies a nonprofit-association rule is a matter of interpretation. ASAM, LOCUS and CALOCUS-CASII are licensed: name them, and do not paste their content.

• Named tool: ask whether the reviewer used it, and which edition.
• Nonprofit association criteria: ask who developed the criteria applied. Oregon's nonprofit rule covers level-of-care placement.
• Level-of-care duties: Illinois and Oregon require the next higher level when the indicated level is unavailable, and Colorado, Illinois and Oregon require the plan to share its assessment.

How do you use a state criteria law in a behavioral-health appeal?

Use the law as a second argument alongside the clinical one, and only after confirming it reaches the plan. Find out which criteria the reviewer applied, compare them with what the statute requires, and state any mismatch in a sentence or two with the citation. Read the current text before you cite it.

1. 01Confirm from the SPD or employer that the plan is insured, and note the state of issue.
2. 02Read the statute's current text, because this page is a snapshot.
3. 03Ask for the criteria in writing. Group health plans and their insurers must provide MH/SUD medical-necessity criteria to participants and contracting providers on request (29 CFR 2590.712(d)(1)); the criteria request letter drafts it.
4. 04Compare the criteria in the denial with the law's requirement: source, edition and added conditions.
5. 05State the mismatch with the citation, and center the appeal on dated clinical evidence, as the level-of-care guide describes.

Do these state laws cover Medicaid managed care, Medicare Advantage or FEHB plans?

Generally not in the same way, because each follows its own rules. Medicare Advantage standards supersede most state law, FEHB contract terms on coverage preempt state health insurance law, and Medicaid managed care depends on the state's program and contract. Check the rule for that coverage before citing anything in the table.

The federal texts are 42 U.S.C. 1395w-26(b)(3) and 5 U.S.C. 8902(m)(1). For Medicaid, California's section excludes Medi-Cal contracts, Illinois includes Medicaid plans with state-set criteria, Georgia has a separate section, and New Jersey's regulator says its law does not reach Medicaid. Governmental and non-electing church plans sit outside ERISA (29 U.S.C. 1003(b)), so ask those plans which rules they follow.

How do federal parity law and the Wit decision fit with state criteria laws?

Federal parity law is a separate layer. The Departments are not enforcing the new parts of the 2024 parity rule, but the statute, the 2013 rule and the 2021 comparative-analysis duty still apply. Wit v. United Behavioral Health turned mainly on ERISA plan wording and did not disturb an unappealed ruling on state-mandated criteria.

The parity status timeline tracks the rulemaking since the May 2025 statement, and Field Assistance Bulletin 2026-03 lists medical-necessity standards and review among EBSA's enforcement priorities.

In Wit, filed August 22, 2023, the Ninth Circuit held the district court erred to the extent it read the ERISA plans to require guidelines coextensive with generally accepted standards, and reversed the denial-of-benefits judgment. The opinion says UBH did not appeal the finding that its guidelines were inconsistent with state-mandated criteria, so that portion “remains intact.” The state-mandate class covered fully insured plans under Connecticut, Illinois, Rhode Island or Texas law. The case was remanded (N.D. Cal. No. 3:14-cv-02346); check the docket before citing it.

How was this table compiled, and what could be out of date?

Each listed law was opened in statute, regulation or enacted bill text on October 31, 2026 and paraphrased here. A law-firm summary alone did not qualify. Nobody licensed has reviewed the page, which is general information and not legal advice. Laws change and mirrors lag, so read the current official text before relying on any row.