How ‘generally accepted standards of care’ create fairer systems for accessing behavioral health treatment
Insurance companies play a major role in determining what kinds of behavioral health care a person receives and what that care costs.
But many insurers use their own internal criteria to determine what type of care is medically necessary. Insurers’ standards are often proprietary, and they can conflict with evidence-based clinical standards for care — and may even violate laws that require parity in coverage for mental and physical health care.
Vague, arbitrary insurance standards to determine medical necessity can lead to delayed or denied coverage or care being cut short. In fact, over 16% of health insurance claims were denied in 2024. These cost-cutting measures have a high societal cost: when people cannot access the behavioral health care they need, their conditions often worsen, and they can end up in costly, inappropriate settings like jails or emergency rooms.
Some states, however, require insurance companies to use “generally accepted standards of care” — evidence-based criteria that are created and endorsed by behavioral health experts and associations.
Examples of sources of these types of criteria include:
- American Society of Addiction Medicine (ASAM) criteria, a set of standards to determine the levels of care and types of treatment appropriate for people with substance use conditions
- Level of Care Utilization System (LOCUS) criteria, a tool to assess patients’ behavioral health care needs consistently and fairly
- Peer-reviewed academic studies
- Medical literature
When insurers use evidence-based, clinically sound criteria, decisions about the level of care patients receive reflect the recommendations and expertise of behavioral health experts, like psychiatrists, psychologists, addiction medicine specialists and other clinicians — not merely cost or convenience.
How patients benefit from generally accepted standards of care
Insurers’ own standards for medical necessity determinations are designed to cut costs, but covering appropriate care has been shown to be at least cost neutral. Ultimately, generally accepted standards of care can save money long-term by getting individuals the care they need sooner — and therefore avoiding a spiral of delayed care, worsening illness, and escalating out-of-pocket costs. Using evidence-based criteria for utilization review can also help insurers avoid parity violations by ensuring best practice care is available for behavioral health conditions, just as it is for physical health conditions.
Broadly, patients have better outcomes when insurers use evidence-based criteria for coverage. For example: without generally accepted standards of care, insurance companies might make a patient repeatedly try and fail cheaper, less effective treatments before covering care that works. With generally accepted standards of care, patients get the treatments their care team prescribes — treatment tailored for their individual needs.
But the benefits of evidence-based criteria for insurance coverage are even more pronounced for certain groups for whom care is often denied, delayed, or difficult to access, like people receiving inpatient care, children and youth, and people seeking medication for opioid use disorder.
People who need inpatient or intensive community-based care
Without generally accepted standards of care, insurers may use arbitrary time limits to cap how long a person can receive inpatient care. This means a patient could be forced out of inpatient care, even when they and their providers agree they aren’t ready to move to a less intensive level of care. Using evidence-based criteria in these situations keeps decisions in the hands of providers, ensuring patients get the right level of care based on their needs.
Insurers’ use of generally accepted standards of care could also improve transitions to community-based treatment, which could prevent a person from needing to be hospitalized in the future. Better access to community-based treatment can generate significant health care savings: the average psychiatric hospitalization in Oklahoma costs $29,646 for approximately 13 days, compared to a cost of roughly $1,000 to $1,400 for a month of assertive community treatment (ACT), according to Healthy Minds’ 2023 analysis of ACT in Oklahoma.
When patients can’t access the right level of care, they may cycle in and out of ERs or end up hospitalized repeatedly. When insurers follow generally accepted standards of care for coverage, they support providers by allowing patients to receive the treatment they need from the start, ultimately reducing rehospitalizations or emergency room encounters and the increased costs associated with these stays.
Children and youth
Oklahoma children and youth have significant mental health challenges — and often struggle to access appropriate behavioral health care. Insurers’ use of evidence-based criteria for youth mental health treatment could streamline care transitions between levels of care and coordination across various systems.
For example, Wraparound is an intensive service model designed to create individualized plans for children and families who need mental health treatment and other support services, and care coordination is a key part of Wraparound. If insurers used the Wraparound model as guidance for care placement and coverage, patients would see better coordination and transitions between various settings and levels of care, improving the quality of the care children receive. And when intensive community-based care is available, kids can receive the care they need while staying in their schools, homes, and communities — a core aim of many intensive service models for youth.
People seeking treatment for opioid use
Medication for opioid use disorder, or MOUD, is considered the gold standard of treatment for people with opioid use disorder, despite longstanding stigma around using medication to treat substance use. While not appropriate for every situation, MOUD has shown to be effective when prescribed. But private insurers often deny coverage for MOUD because of limited availability or cost, despite the fact that most generic medications for opioid use disorder are considered Tier 1 drugs — insurers’ preferred generic medications due to their low cost. When insurers do cover MOUD, they often require a patient to get a prior authorization for it, which can cause treatment delays.
Each year in the U.S., opioid overdose, misuse, and dependence are associated with $35 billion in health care costs, $14.8 billion in criminal justice costs, and $92 billion in lost productivity. Improving access to MOUD could save between $25,000 and $105,000 per person treated over their lifetime, compared to people who receive no treatment.
Adopting generally accepted standards of care could ensure access to MOUD without unnecessary delays or denials of coverage — that way, when a person is ready to start treatment, they can start right away. In the case of opioid use disorder, even a short delay in care have serious complications: treatment delays are associated with a higher risk of continued illicit drug use, criminal activity, infectious disease, and mortality, as well as a reduced probability of entering treatment and treatment adherence.
How other states have implemented generally accepted standards of care
To better align best practices with medical necessity criteria and utilization review decisions, several states have passed laws requiring insurance providers to follow evidence-based behavioral health criteria to determine what care is medically necessary and therefore will be covered.
At least nine states have passed laws requiring insurers to use generally accepted standards of care, including Colorado, Virginia, and New Mexico.
At least ten other states have passed laws requiring insurers to follow American Society of Addiction Medicine (ASAM) criteria for substance use treatment, including North Carolina, Tennessee, Texas, and West Virginia. Medicaid also requires use of ASAM criteria.
States can use “safe harbor” language in their legislation to specify that requirements for evidence-based criteria only apply to care that is legal in the state. States can also carve in or out specific evidence-based practices and list examples of sources for criteria that fall within the scope of the law.
Implications for Oklahoma
Oklahoma currently does not require insurance companies to use generally accepted standards of care when making coverage determinations for mental health and substance use treatment. Lawmakers will take up the issue during the 2026 legislative session with Senate Bill 1646 by Sen. Todd Gollihare (R-Kellyville), which is tailored to Oklahoma’s unique needs
If legislators choose to adopt generally accepted standards of care, it would be continuing in Oklahoma’s standing as a leader on mental health parity issues — and would make care fairer and more consistent for Oklahomans.
Additional resources
Ramstad model language for legislation requiring generally accepted standards of care
