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Bill

SB 212

AN ACT relating to mental health coverage and declaring an emergency.

2026 Regular Session Introduced by Brandon Smith

Strengthens parity and transparency for mental health benefits by aligning coverage with medical/surgical benefits, expanding reviews, and enforcing compliance.

to Committee on Committees (S)
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WeVote Research Nonpartisan
Bill Summary · SB 212

Overview

SB 212 (2026 Reg. Session, Kentucky) is an enacted bill relating to mental health coverage within health benefit plans and Medicaid, with an emergency provision. It strengthens parity between mental health and physical health benefits, expands review and appeal rights, and creates enhanced enforcement and reporting mechanisms. Some provisions apply to plans issued or renewed on or after January 1, 2027, with an emergency section accelerating certain sections upon passage.

Purpose and intent

  • Promote parity between mental health treatment benefits and medical/surgical benefits.
  • Ensure transparency and consistency in medical necessity criteria for mental health care.
  • Improve access to timely internal and external reviews of coverage decisions.
  • Provide enforcement mechanisms to deter noncompliance and to protect insured persons and health professionals.

Key provisions and changes

Expanded definitions and parity standards

  • Clarifies terms for use in mental health coverage, including:
    • Classification of benefits
    • Mental health condition (aligned with DSM criteria or ICD classifications)
    • Nonquantitative treatment limitations (NQTLs)
    • Treatment of a mental health condition (covering outpatient, inpatient, residential, crisis services, etc.)
  • Insurers must ensure that terms or conditions for mental health treatment are no more restrictive than those for physical health treatment within the same benefits classification.

Parity and coverage requirements (Section 2)

  • Mental health benefits must be no more restrictive in terms of deductibles, co-pays, out-of-pocket limits, visit/episode limits, etc., compared to physical health benefits.
  • Combined deductibles and out-of-pocket amounts for mental and physical health conditions (bundled for policy limits).
  • Plans may use managed care for mental health if they do so for physical health, but must ensure parity in management and criteria.
  • Prohibits nonquantitative treatment limitations on mental health benefits that are more restrictive than those for medical/surgical benefits within the same classification.
  • External federal parity standards (Mental Health Parity and Addiction Equity Act) are incorporated by reference.

Annual reporting and transparency (Section 2)

  • Insurers must file an annual report describing:
    • Process used to develop medical necessity criteria for mental health and medical/surgical benefits
    • All applicable NQTLs across benefit classifications
    • Compliance analyses showing comparability of mental health criteria and limitations to medical/surgical criteria
    • Evidence and factors used to determine NQTL application and any deviations
    • Any additional information prescribed by the commissioner
  • Reports due by April 1 each year (and shared with the Legislative Research Commission and published publicly on the department’s website)

Audits and complaints (Section 2)

  • Insurers may be independently audited for compliance.
  • A state hotline will be established for complaints by health professionals and insureds.
  • Prohibits retaliation against providers who file complaints (retaliation can involve network participation, credentialing, reimbursement, or utilization review).

Enforcement and remedies (Section 2)

  • Willful violations constitute discrimination and unfair trade practices.
  • Remedies include penalties, damages, costs, attorney’s fees, and other relief as determined by courts or the attorney general.
  • The Attorney General can enforce provisions, demand records, and pursue actions with court-ordered relief and penalties.
  • Provisions allow private right of action by injured individuals or health professionals, subject to notice and cure requirements.

Mental health review process improvements (Section 3)

  • Insurers must publicly disclose review criteria for mental health claims, ensuring criteria are clinically specified and aligned with generally accepted standards of care (including standards from the American Society of Addiction Medicine when applicable).
  • Internal and external appeal timelines tightened:
    • Internal appeal decisions for standard requests: within 5–7 days after receipt
    • Expedited internal appeals: within 24–48 hours
    • External reviews: decisions within 7–14 days after all information is provided
  • External and internal review processes must be conducted by appropriately qualified clinicians, with specific requirements for who may conduct appeals.

Internal and external appeals (Sections 4–5)

  • Internal appeal processes must be available and disclosed; coverages denials include clear instructions to file internal appeals.
  • Department-administered review mechanism to address coverage denials, including information-sharing requirements with insurers and covered persons.
  • Insurers must provide detailed internal appeal determinations, including medical and scientific justifications and licensing information.
  • External review program requires filing fees ($25) unless hardship is shown; prospective assignment to independent review entities on a rotating basis; expedited reviews for urgent cases; confidentiality protections.

Medicaid alignment (Section 6)

  • Medicaid-related entities (Department for Medicaid Services and managed care organizations) must comply with specified statutory provisions and reporting requirements; Section 6 references the new provisions and their integration into Medicaid administration.

Effective dates (Section 7)

  • Sections 3–5 take effect January 1, 2027.

Emergency declaration and immediate effect (Section 12)

  • An emergency is declared to ensure parity in mental health benefits; Sections 1, 2, 6, 7, 8, 9, and 10 take effect upon passage (emergency provisions), with other sections phasing in as noted.

Who is affected

  • Health benefit plans and insurers issuing or renewing plans after January 1, 2022 (and specifically new sections for post-2027 plans).
  • Covered individuals and authorized representatives seeking mental health coverage.
  • Health professionals who submit complaints or engage in internal/external reviews.
  • Medicaid, including managed care organizations and the Department for Medicaid Services.
  • The Kentucky Attorney General and the Department of Insurance/related enforcement bodies.

Procedural and timeline notes

  • Annual reporting obligations by April 1 each year starting after the act’s effective period.
  • Internal appeal timelines generally within 30 days, with expedited timelines of 24–48 hours where clinically necessary.
  • External review requests must be filed within 60 days after notice of an adverse determination, with mandated timelines for independent review decisions (7–14 days standard, 24 hours–7 days expedited).
  • Section 7 creates a staggered effective date: certain provisions apply to plans issued or renewed on/after January 1, 2027.
  • Federal alignment and potential federal waivers/plan amendments are anticipated under Section 8, with a timeline to seek authorization if necessary to avoid loss of federal funds. Section 9 confirms Section 6 and 8 as the specific authorization pathway.

If you’d like, I can provide a section-by-section line-item digest or a one-page quick reference checklist for insurers and Medicaid administrators.

Compiled from official sources — confirm details with the bill’s official record.

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