SB2425 would require health insurers, mutual benefit societies, and health maintenance organizations in Hawaii to honor a patient’s valid written assignment of benefits for covered substance use disorder treatment services. In practical terms, when a patient assigns benefits to a licensed residential or detoxification provider, the insurer would have to pay that provider directly, generally within 30 days of receiving a compliant claim. The bill also requires insurers to provide an explanation of benefits to the assigned provider upon request when proper authorization is presented.
The measure further prohibits new or renewed policies, contracts, or plan documents from including anti-assignment clauses that block or void assignments to substance use disorder treatment providers. It applies to fully insured health plans regulated by state law, but not to self-funded employer plans governed exclusively by ERISA except where federal law allows. Violations would be treated as unfair methods of competition and unfair or deceptive acts or practices in the business of insurance, and the insurance commissioner would be authorized to adopt rules and enforce the new requirements.
Impact
The bill would add new sections to chapters 431, 432, and 432D of the Hawaii Revised Statutes, creating a specific assignment-of-benefits rule for substance use disorder treatment across insurers, mutual benefit societies, and HMOs. It would limit the enforceability of anti-assignment provisions in covered policies and contracts, require direct payment to qualifying providers, and create a regulatory enforcement mechanism through the insurance commissioner. The bill also preserves existing contracts to the extent required by the Hawaii and U.S. Constitutions and expressly excludes self-funded ERISA plans unless federal law permits application.
Sentiment
The available voting record suggests broad support in committee for the bill’s policy goal of improving access to substance use disorder treatment. The measure passed the Senate Health and Human Services, Commerce and Consumer Protection, and Judiciary committees unanimously or near-unanimously, each with amendments. At the same time, the final status indicates the House Committee on Consumer Protection recommended deferral, showing that while the bill advanced in the Senate, it did not move forward cleanly through all committees.
Contention
The main policy issue is whether insurers should be compelled to honor assignments of benefits for substance use disorder providers and whether anti-assignment clauses should be barred. Supporters appear to view the bill as reducing administrative barriers, improving provider participation, and helping patients access treatment. Potential concerns likely center on insurer administration, contract rights, and the scope of state regulation, especially the bill’s interaction with self-funded employer plans under ERISA and its constitutional savings clause for existing contracts. The deferral recommendation from CPC suggests some unresolved concern in that committee, though no transcript is available to identify specific objections.
Residential Substance Use Disorder Treatment Act of 2023 This bill revises and reauthorizes through FY2027 grants for residential substance use disorder treatment programs at state and local correctional and detention facilities. Among the revisions, the bill replaces statutory references to substance abuse with substance use disorder, specifies that the term residential substance use disorder treatment program includes a medication-assisted treatment program, requires the chief medical officer or other staff overseeing a program to complete training on the science of addiction and the latest research and clinical guidance on treating substance use disorders in criminal justice settings, and allows people who are awaiting trial or in pretrial detention to participate in the programs.
Requiring licensure of outpatient substance use disorder treatment facilities and relative to complaint investigation of treatment facilities by the department of health and human services office of the ombudsman and making an appropriation therefor.
Establishing the Nonnarcotic Medication Substance Use Disorder Treatment Program; in organization and jurisdiction of courts of common pleas, providing for court assessments for substance use disorder treatment; in other criminal provisions, further providing for supervisory relationship to offenders; and, in Pennsylvania Board of Probation and Parole, further providing for supervisory relationship to offenders.