Federal and state laws require insurance companies to cover mental health treatment at the same level as they do for physical healthcare.1 These laws, known as “mental health parity laws,” have existed for years in one form or another. Yet mental health insurance denials in California have continued at rates far above the denials for medical or surgical care.
People seeking access to mental health treatment in California often face prior authorization requirements, claim denials, and inadequate provider networks. Behavioral health insurance access across the state can often be restrictive, despite mental health parity laws intended to protect against these disparities.
While California has some of the strongest parity laws in the nation, the California Department of Managed Health Care has uncovered many widespread violations by major insurers. This is something the state has in common with the rest of the country.2
Learning about why mental health parity violations continue across the state can help you be a better advocate for yourself or a loved one when it comes to accessing mental health care. This article will explore the frequent gap between parity laws and coverage, along with what you can do when facing denied mental health claims.
Founded in 2010, A Mission For Michael (AMFM) offers specialized mental health care across California, Minnesota, and Virginia. Our accredited facilities provide residential and outpatient programs, utilizing evidence-based therapies such as CBT, DBT, and EMDR.
Our dedicated team of licensed professionals ensures every client receives the best care possible, supported by accreditation from The Joint Commission. We are committed to safety and personalized treatment plans.
What Are California’s Mental Health Parity Laws?
California’s mental health parity law builds on already-existing federal protections established by the Mental Health Parity and Addiction Equity Act of 2008. This prevents insurance plans from imposing more restrictive limitations on mental health benefits than other health-based care.3
Lawmakers in Sacramento have strengthened these federal protections with additional requirements. For instance, covering a broad range of conditions, requiring better transparency for coverage issues, and closing potential loopholes for mental health disorders.
Furthermore, California law states that insurance companies must maintain provider networks that give their members timely access to care. Also, appointment wait times can’t be greater than they would be for physical health services. If networks don’t have enough providers, then insurers must authorize out-of-network care at the in-network rate.4
These laws are overseen by several agencies, including the Department of Labor and the Department of Health and Human Services at the federal level. They’re also upheld by the California Department of Managed Health Care and the state Department of Insurance.
The Reasons These Laws Exist
Mental health parity laws emerged after decades of insurance company discrimination against people trying to access care. Before these protections, insurance providers could impose annual or lifetime limits on your mental health coverage, often while providing unlimited coverage for physical health issues.
Across the industry, insurance companies regularly treated mental health care as optional or less legitimate than physical health. Therefore, they frequently denied coverage for things they considered “not severe enough” to deserve coverage or reimbursement.
This discrimination was also indicative of many outdated, incorrect beliefs about mental illness being a sign of personal weakness, rather than a legitimate and biological condition. As a result, many people who were experiencing conditions like severe depression, bipolar disorder, or schizophrenia were routinely denied evidence-based care and access to treatment services.
Before parity laws existed, many people also quickly exhausted their existing mental health benefits and were forced to pay out-of-pocket to continue or end their treatment services prematurely. This caused further destabilization and frustration for those in need of help.
Why Mental Health Claim Denials Happen in California
Mental health insurance denials throughout the state happen in large part because protection enforcement can be inadequate, and insurance companies tend to look for ways to exploit existing loopholes.
Some common reasons for denied mental health claims can include:
- Poor provider networks without enough clinicians: Insurance companies sometimes fail to contract with enough mental health therapists and agencies, forcing people to seek out-of-network care that gets denied or reimbursed at a far lower rate.
- Vague, subjective criteria: Insurers often apply shifting and difficult-to-understand standards for determining when mental health treatment is medically necessary.
- Prior authorization requirements: Prior authorizations usually involve a difficult pre-approval process, which can delay or prevent your access to much-needed care.
- Arbitrary limitations: California residents can run into visit limits and level-of-care requirements for mental health treatment, all of which can cap service access due to insurance denials to pay.
- Low reimbursement rates: Lower payment rates for services can discourage providers from taking insurance at all, forcing people to use out-of-network providers that are typically denied at higher rates.
- A lack of transparency: Insurers often refuse to share the criteria they use to make coverage decisions, which makes it extremely difficult to challenge denials effectively.
- Financial incentives: Denying claims saves insurance companies money, with the penalties for any violations usually being much lower than the savings they can recoup.
Statistics About Mental Health Denials in California
California has required all health plans to pay for medically necessary mental health treatment since 2021, yet mental health denials remain common. In fact, over 70% of mental health denials that reach the appeals process are eventually overturned.5
Contested denials handled by the California Department of Managed Health Care division tripled between 2012 and 2016, jumping from around 1,500 cases to more than 4,200. In 2023 alone, the department also levied more than $53 million in fines against health plans for parity violations.5
Sadly, more than half of Californians still report struggling to find a mental health provider that takes their insurance. Plus, more than 80% of Californians want the governor and the legislature to increase access to mental health treatment across the state.5,6
Empowering Yourself Against Insurance Denials
Having a claim denied can be infuriating and frustrating, but knowing your rights and how the appeals process works can help you fight back. The following steps can help.
Document All Interactions With the Insurance Company
Keep detailed records of every interaction with your insurance provider. Take down the date, time, representative’s name, and what you talked about.
Also, make sure to save any correspondence from your provider, including denial letters, authorization requests, and other mail – these could be important in an appeal.
You can request written confirmation of any coverage decisions, which can help to protect you if they later change their decision.
Talk to Your Providers About How They Can Help
Your mental health provider can also help you push back against treatment denials. Ask them to write a letter for you explaining why the recommended treatment is necessary, referencing specific symptoms, diagnoses, and how your treatment plan will address your concerns.
Insurance companies sometimes take a clinician’s words seriously, and your provider can also help you better understand the jargon and criteria insurers use to justify a denial.
File Your Appeal
Under California law, you should have 180 days from the denial date to register an appeal. Be sure to submit this in writing with any supportive documentation you have.
Try to state clearly why you feel the denial is unwarranted and if you think it violates the state or federal parity laws. Insurance companies must respond to a standard appeal within 30 days, or within 72 hours in urgent cases.
Explore Filing a Complaint With State Regulators
Report any possible mental health parity violations to the Department of Managed Care or the Department of Insurance. These agencies exist to investigate complaints and can fine insurance companies for violations.
Look Into Out-Of-Network Care
In an emergency situation, it’s important to access the care you need. Plans must, by law, cover out-of-network mental health services when their networks lack adequate coverage.
Document your attempts to find in-network providers and save any and all correspondence about this. Doing so can strengthen your case that going out-of-network was medically necessary.
Access High-Quality, Accessible Care at AMFM
Navigating your coverage shouldn’t have to be so hard when you’re looking for help. A Mission For Michael knows the frustration of dealing with insurance companies and potential care denials, which is why we work to help you streamline and simplify the process.
We handle your insurance verification for you, confirming your current mental health benefits to help explain what your plan covers and clarifying any out-of-pocket costs. You’ll know exactly what to expect before making treatment decisions.
We’re also in-network with most major insurance providers across California, Virginia, and Washington – which means lowered costs for you and fewer barriers to accessing care.
If your insurance provider questions your level of care, AMFM will provide the documentation and medical justifications you need. Our staff has a wealth of experience in navigating the insurance system and can help you handle prior authorizations, appeals, and necessity reviews so you can focus on your recovery.
Access to high-quality care shouldn’t depend on complex insurance benefits. We’ll walk you through your options and help you make informed decisions, having previously helped countless people secure the treatment they need and deserve.
Contact A Mission For Michael today to discuss your benefits and how we can support your path toward recovery.
Frequently Asked Questions About Mental Health Insurance Denials in California
If you’re concerned about insurance denials for mental health treatment, it’s understandable to have some ongoing questions after the information in this article. This is why we’ve provided the following answers to FAQs on the topic – to make the process as clear as possible for you.
What Should I Do if My Insurance Denies Coverage?
Don’t automatically accept the company’s denial as the final word — these decisions can often be overturned via the appeals process.
Request a written explanation of the denial, including the criteria they applied, and contact your treatment provider immediately to request a letter of support. File the appeal with your insurance provider as soon as possible.
Additionally, you can request an independent review through the California Department of Managed Health Care. This free process can assist you in advocating for your care.
How Will I Know if My Insurance Provider Is Violating Existing Parity Laws?
A violation occurs when insurers apply stricter rules to mental health care than they would for other medical conditions. Other violations may include limiting beneficial treatment to a specific time period and inadequate levels of providers.
If you think there’s been a violation, contact the Department of Managed Care and the Department of Insurance, documenting your evidence and communications with the company.
Can Insurance Companies Require Prior Authorization for Mental Health Treatment?
They can, but the process technically is not allowed to be more burdensome than for anything else. For example, if your insurer requires prior authorization before each therapy appointment but not for every physical therapy appointment, this would be a violation.
References
- Centers for Medicare & Medicaid Services. (2024). The mental health parity and addiction equity act (MHPAEA). Www.cms.gov. https://www.cms.gov/marketplace/private-health-insurance/mental-health-parity-addiction-equity
- Smithberg, K. (2026). Insurers face record fines as states crack down on mental health parity violations. Benefitspro. https://www.benefitspro.com/2026/01/14/insurers-face-record-fines-as-states-crack-down-on-mental-health-parity-violations/
- California Department of Health Care Services. (2024, April 17). Mental health parity (Medicaid mental health parity information). https://www.dhcs.ca.gov/formsandpubs/Pages/MentalHealthParity.aspx
- California Department of Managed Healthcare (n.d.). Timely Access to Care. Www.dmhc.ca.gov. https://www.dmhc.ca.gov/HealthCareinCalifornia/YourHealthCareRights/TimelyAccesstoCare.aspx
- The Office of Senator Scott Wiener (2025, February 18). As Health Insurance Denial Rates Spike, Senator Wiener Introduces Legislation to Hold Insurance Companies Accountable For Senseless Denials. Senator Scott Wiener. https://sd11.senate.ca.gov/news/health-insurance-denial-rates-spike-senator-wiener-introduces-legislation-hold-insurance
- California Public Radio (2025). Insurance denials can devastate mental health patients. California is considering how to fix that. Capradio.org. https://www.capradio.org/articles/2025/03/20/insurance-denials-can-devastate-mental-health-patients-california-is-considering-how-to-fix-that/
