Generally Accepted Standards Laws: When Payers Must Use Nonprofit Clinical Criteria
How state generally-accepted-standards laws like California's SB 855 constrain behavioral health medical-necessity review — mandated nonprofit criteria such as ASAM and LOCUS, where the laws apply, and the appeal playbook when a plan used proprietary guidelines.
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Direct answer
Generally accepted standards of care behavioral health: what operators need to know
How state generally-accepted-standards laws like California's SB 855 constrain behavioral health medical-necessity review — mandated nonprofit criteria such as ASAM and LOCUS, where the laws apply, and the appeal playbook when a plan used proprietary guidelines. Criteria-mandate laws require state-regulated plans to use nonprofit-association criteria — ASAM, LOCUS and related instruments — for behavioral health level-of-care decisions.
A set of state laws — California's SB 855 is the archetype — requires state-regulated health plans to base behavioral health medical-necessity determinations on current generally accepted standards of care, and to use level-of-care criteria developed by nonprofit professional associations for the relevant specialty rather than proprietary internal guidelines. In practice that points to instruments like the ASAM Criteria for substance use disorders and LOCUS, CALOCUS-CASII, and ECSII for mental health conditions across age groups. California's managed-care regulator enforces the requirement for plans it licenses, and several other states have since adopted requirements in the same family.
These laws grew out of litigation — most prominently the Wit v. United Behavioral Health case, in which a federal district court found an insurer's internal guidelines inconsistent with generally accepted standards of care; the decision's appellate history was mixed, but its factual record shaped state legislation that wrote the standards directly into statute. For provider teams, the operational value is concrete: in a criteria-mandate state, a denial built on proprietary guidelines can be challenged on what criteria were used, not only on what the record shows. This guide is operational context, not legal advice — statutes differ and change; verify current law with counsel.
Key takeaways
The short version
- Criteria-mandate laws require state-regulated plans to use nonprofit-association criteria — ASAM, LOCUS and related instruments — for behavioral health level-of-care decisions.
- The laws bind state-regulated products; self-funded ERISA plans generally sit outside them.
- Document in the mandated instrument's own terms — a LOCUS-scored or ASAM-dimensional record makes the statute usable.
- When a denial rests on proprietary guidelines in a mandate state, ask which criteria were applied and cite the statute in the appeal.
- Route unresolved cases to the state regulator's review process, which in California includes independent medical review.
1. What these laws require
| Element | Requirement | Operational meaning |
|---|---|---|
| Standard of review | Medical-necessity determinations based on current generally accepted standards of behavioral health care | Plan guidelines cannot be narrower than the professional standard of care |
| Criteria source | Level-of-care criteria developed by nonprofit professional associations for the relevant specialty | ASAM for SUD; LOCUS, CALOCUS-CASII, ECSII commonly recognized for mental health across ages |
| Scope of conditions | Coverage of medically necessary treatment for mental health and substance use conditions on par with physical health | Level-of-care and duration decisions follow the instrument, not benefit-design shortcuts |
| Enforcement | State insurance or managed-care regulators, with complaint and independent-review pathways | A named escalation route exists beyond the plan's internal appeals |
2. Where the laws apply — and where they do not
Criteria-mandate statutes bind the products the enacting state regulates: fully insured commercial plans and, depending on the statute, other state-licensed coverage. Self-funded employer plans under ERISA generally follow federal law instead, so the same administrator can be bound on one member and not on the next. The regulatory-home and funding-type fields you capture at benefits verification decide whether a criteria-mandate argument is available for a given case.
Outside mandate states, the same instruments still matter — many payers voluntarily adopt or license ASAM and LOCUS-family criteria, and parity frameworks separately constrain how behavioral health limitations compare with medical ones. The mandate simply converts a clinical-consensus argument into a statutory one where it applies.
3. Operate the mandated instruments
- 01
Acquire and license properly
Obtain the current instruments your cases need — ASAM Criteria for SUD levels of care, LOCUS-family tools for mental health — through their publishers, with training materials for the clinicians who will score them.
- 02
Train scoring, not vocabulary
The instruments are structured assessments with dimensions and composite logic. Reviewers recognize a properly scored assessment — and recognize decoration masquerading as one.
- 03
Score at decision points
Initial level-of-care selection, continued-stay reviews, and step-down decisions each get a dated score with the clinical evidence behind each dimension rating.
- 04
Retain the worksheets
The scored instrument is the exhibit. Keep it in the case record so requests, concurrent reviews, and appeals can attach the assessment the statute contemplates.
- 05
Reconcile with payer criteria stamps
Your payer-criteria matrix already tracks which criteria each payer applies. In mandate states, add the statutory layer: what the plan is required to use, which is not always what its portal template asks for.
4. The appeal playbook for proprietary-guideline denials
- 01
Establish the case is in scope
Confirm the plan is state-regulated in a mandate state and the service is behavioral health within the statute's scope. If the plan is self-funded, choose a different appeal theory.
- 02
Ask what criteria were applied
Request the specific criteria, version, and reviewer credentials in writing. A denial citing proprietary guidelines for a level-of-care decision is the fact your appeal is built on.
- 03
Present the mandated instrument
Attach your scored ASAM or LOCUS-family assessment supporting the requested level, dimension by dimension, and state the conclusion in the instrument's terms.
- 04
Cite the statute plainly
One paragraph: the law requires determinations under generally accepted standards using nonprofit-association criteria; the denial applied other criteria; the enclosed assessment applies the mandated instrument and supports the requested care.
- 05
Escalate to the regulator
If internal appeal fails, use the state's complaint and independent-review pathway, with the criteria question framed exactly as the statute frames it. Track outcomes by plan — patterns support regulator attention.
5. Wire the mandate into your jurisdiction register
- Add a criteria-mandate field per state: statute citation, covered products, named or recognized instruments, effective date, and last-verified date
- Stamp cases at intake with regulatory home, funding type, and mandate applicability so appeal writers inherit the answer instead of re-deriving it
- Keep instrument versions current — criteria editions change, and your ASAM edition-by-payer matrix already tracks half of this problem
- Tag appeal outcomes where the mandate was cited, so you learn which plans respond at internal appeal versus regulator review
- Re-verify the statutory landscape quarterly; this family of laws is still growing, and effective dates matter case by case
Common questions
Answers before you build.
What does "generally accepted standards of care" mean in these laws?+
The statutes define it by reference to the standards of the relevant clinical specialty — typically evidenced by criteria and guidelines developed by nonprofit professional associations, such as the ASAM Criteria for substance use disorders and LOCUS-family instruments for mental health. The point is to anchor medical-necessity review to professional consensus rather than plan-authored guidelines.
Which states have criteria-mandate laws?+
California's SB 855 is the most developed example, and several other states have adopted requirements in the same family. Because scope and effective dates differ by state and the landscape is still moving, verify the current statute for each state in your payer mix with counsel rather than relying on any fixed list.
Do these laws apply to self-funded employer plans?+
Generally no. Self-funded ERISA plans follow federal law rather than state insurance codes, so the criteria mandate typically does not bind them — even when a familiar insurance brand administers the plan. Capture funding type at benefits verification so each case carries the right appeal theories.
What criteria apply for children and adolescents?+
For mental health, the commonly recognized nonprofit instruments include CALOCUS-CASII for children and adolescents and ECSII for early childhood, alongside LOCUS for adults. For adolescent substance use disorders, the ASAM Criteria's adolescent volume applies as payers adopt it. Confirm which instruments your state's law and each payer recognize.
Practical closeout
Use this operator checklist.
- Criteria-mandate laws require state-regulated plans to use nonprofit-association criteria — ASAM, LOCUS and related instruments — for behavioral health level-of-care decisions.
- The laws bind state-regulated products; self-funded ERISA plans generally sit outside them.
- Document in the mandated instrument's own terms — a LOCUS-scored or ASAM-dimensional record makes the statute usable.
- When a denial rests on proprietary guidelines in a mandate state, ask which criteria were applied and cite the statute in the appeal.
- Route unresolved cases to the state regulator's review process, which in California includes independent medical review.
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Sources & methodology
Trace the operational claims.
Marsa Health Editorial reviewed the primary and research sources below on July 28, 2026. We translate them into workflow controls, distinguish proposals from final rules, and flag where plan, program, state, contract, or clinical requirements vary.
- 01SB-855 Health coverage: mental health or substance use disorders (2020) California Legislative InformationCalifornia statute requiring state-regulated plans to base behavioral health medical-necessity determinations on current generally accepted standards of care and criteria developed by nonprofit professional associations.Accessed or rechecked July 28, 2026
- 02DMHC guidance on SB 855 implementation California Department of Managed Health CareState regulator statement on SB 855's requirements for California-regulated plans, including use of nonprofit clinical criteria for level-of-care decisions.Accessed or rechecked July 28, 2026
- 03The ASAM Criteria, 4th Edition American Society of Addiction MedicineOfficial description of the fourth-edition criteria, the dimensional changes including Dimension 6 person-centered considerations, and the multi-volume release plan.Accessed or rechecked July 28, 2026
- 04How to appeal an insurance company decision Centers for Medicare & Medicaid ServicesFederal overview of internal appeals, external review, notices, and general appeal timing. Plan and state rules can differ.Accessed or rechecked July 28, 2026
- 05External Appeals Centers for Medicare & Medicaid ServicesFederal external-review process and consumer protections.Accessed or rechecked July 28, 2026
- 06CMS Interoperability and Prior Authorization Final Rule CMS-0057-F Centers for Medicare & Medicaid ServicesCurrent implementation dates, decision timeframes, denial-reason requirements, metrics, and API provisions for impacted payers.Accessed or rechecked July 28, 2026
Organizational author. Editorial review covers source accuracy, search intent, workflow boundaries, and human-oversight requirements. This material is educational and does not provide clinical, legal, coding, or coverage advice.
No named clinical or legal expert reviewer is attributed to this version. Marsa Health does not invent reviewer credentials.
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What changed and when
July 28, 2026
Initial publication, source review, and operational editing.