MS HB40

Requires all insurance policies issued, amended, or renewed on or after January 1, 2026, that provide hospital, medical, or surgical coverage to include coverage for medically necessary mental health and substance use disorder treatment.

Prohibits insurers from limiting benefits for chronic or pervasive mental health and substance use disorders to short-term or acute treatment, and from denying coverage based on services being available through public entitlement programs.

Mandates insurers use current generally accepted standards of care and apply level of care placement criteria from nonprofit professional associations when conducting utilization review for mental health and substance use disorder services.

Requires insurers to implement formal education programs, provide free clinical review criteria to providers and patients, conduct interrater reliability testing with a minimum 90% pass rate, and track how clinical guidelines are used in authorization and denial decisions.

Establishes civil penalties of up to $5,000 per violation (or $10,000 for willful violations) enforced by the Commissioner of Insurance, and voids any insurance contract provisions that reserve discretionary authority to the insurer in ways inconsistent with state law.