Colorado House Bill 25-1002, effective January 1, 2026, amends Colorado Revised Statutes § 10-16-104(5.5) to require health benefit plans to use nationally recognized, not-for-profit clinical criteria when making coverage and utilization review determinations for behavioral health, mental health, and substance use disorder treatment. The statute establishes a uniform approach to coverage and utilization review and tightens state-level expectations for compliance with the federal Mental Health Parity and Addiction Equity Act (MHPAEA).

Colorado joins other states like Washington and Virginia who passed similar legislation this year.

Colorado HB 25-1002: Key requirements effective January 1, 2026

  • Health benefit plans must cover medically necessary prevention, screening, and treatment for behavioral, mental health, and substance use disorders at parity with medical/surgical benefits and without discriminatory benefit design.
  • Utilization review criteria must be consistent with generally accepted standards of care and sourced from unaffiliated, nationally recognized not-for-profit clinical specialty associations (i.e. LOCUS, CALOCUS-CASII, ECSII, supported by the American Academy of Child and Adolescent Psychiatry (AACAP) and the American Association of Community Psychiatrist (AACP)).
  • For substance use disorder treatment, plans must apply the most recent American Society of Addiction Medicine (ASAM) criteria for placement, medical necessity, and utilization management. The Insurance Commissioner may designate an alternative nationally recognized, evidence-based not-for-profit criterion if ASAM criteria become unavailable or inconsistent with best practices.
  • Plans may not apply different, additional, conflicting, or more restrictive criteria than the specified sources for decisions within the scope of those criteria. If a requested service or level of care is denied, the adverse benefit determination must include full detail of the assessment and criteria used.
  • Plans may not limit benefits for chronic behavioral, mental health, or substance use disorders to short-term symptom reduction at any level of care.
  • If a plan offers any benefits for a mental health condition or substance use disorder in any classification (e.g., inpatient, outpatient, emergency), it must offer meaningful benefits for that condition or disorder in every classification in which medical/surgical benefits are provided, including coverage of “core treatments” indicated by generally accepted standards of care.
  • If there is no core treatment for a covered mental health condition or substance use disorder in a particular classification, the plan is not required to provide benefits for a core treatment in that classification; however, the plan must still provide benefits for that condition or disorder in every classification in which it provides medical/surgical benefits.
  • Network adequacy and access provisions are reinforced: plans must authorize medically necessary treatment with appropriate nonparticipating providers at in-network cost sharing when services are not available within time/distance standards, and may not reverse medical necessity determinations through claim reviews or audits except in cases of fraud or lack of a valid policy at the time of service.
  • MHPAEA references are updated to include nonquantitative treatment limitation (NQTL) comparative analysis requirements and federal parity rulemaking cited in 78 Fed. Reg. 68246 (Nov. 13, 2013) and 89 Fed. Reg. 77586 (Sept. 23, 2024).
  • The Insurance Commissioner may promulgate rules establishing utilization review compliance standards, parity data testing using outcomes data, standard definitions for coverage requirements, timelines for comparative analysis submissions, and documented access timelines for follow-up visits after an initial behavioral health encounter.

Applicability and enforcement
The law applies to any individual, entity, or contracting provider performing utilization review for a health benefit plan and prohibits policy or provider agreement terms that undermine these requirements. The statute does not expand coverage beyond Colorado’s essential health benefits benchmark but requires parity-consistent coverage where exclusions are not permitted under MHPAEA. The act takes effect January 1, 2026, subject to Colorado’s referendum petition process; if a petition is filed within the statutory window, the law would take effect only if approved by voters.

Our Take
Colorado is joining other states, and the recent, but unenforced MHPAEA regulations, in significantly narrowing plan discretion in behavioral health utilization review by anchoring determinations to external, not-for-profit clinical criteria and by requiring meaningful, classification-wide parity for core treatments. The clarification that plans need not cover a “core treatment” in a classification where none exists — while still requiring benefits for the condition across all classifications offering medical/surgical benefits — will be important in benefit design. Plans should prepare for heightened scrutiny of utilization reviews, NQTLs, and network adequacy, ensure adverse determination workflows provide detailed criteria-based rationales, and review vendor contracts and clinical criteria for alignment with the statute ahead of the January 1, 2026 effective date.