SECTION 1. Notwithstanding any special or general law to the contrary, the Office of Medicaid, shall develop regulations to effectively implement the federal mental health parity law within its programs and with its contractors, to ensure that there is no distinction, in either a quantitative or non-quantitative manner, for patients receiving inpatient and outpatient psychiatric services as they are for medical care services.  The Office of Medicaid, its contractors, and the Medicaid Managed Care Organizations shall further ensure that the level of psychiatric services and coverage provided to recipients of medical assistance are the same for patients covered in each of its programs.  Said regulations shall further require that the office of Medicaid and its contractors shall pay for such services that are deemed appropriate and within the parity level of coverage.  The Office of Medicaid shall promulgate the regulations no later than October 1, 2011.

SECTION1 2. The Office of Medicaid shall contract with an outside contractor to develop an analysis of the difference between inpatient and outpatient psychiatric/behavioral health hospital costs and the rates of payment for said services by the office of Medicaid, its contractors, and for the Medicaid Managed Care Organizations, for state fiscal years 2008, 2009, and 2010.  Such analysis shall take into account the differences in costs and payments for freestanding psychiatric hospitals compared to psychiatric units at acute care hospitals, and shall further include a plan to address such differences between said costs and payments for all hospitals.  Said analysis shall be completed by December 1, 2011 and reported publicly to the House Committee on Ways and Means, the Senate Committee on Ways and Means, the Joint Committee on Health Care Financing, and the Joint Committee on Mental Health and Substance Abuse.

SECTION 3.  Notwithstanding any special or general law to the contrary, the Office of Medicaid and its contractors, shall establish a separate payment methodology for covering the cost of psychiatric care provided in a hospital Emergency Department, outpatient settings, or in a medical/surgical unit of a hospital for those patients that are not able to access an appropriate inpatient psychiatric level of care and are being boarded in either of the three levels of care outlined above.  Said regulations and payment methodology shall include payment for consultation and ongoing care of such patients to all appropriately licensed psychiatric and behavioral health providers that are employed by or working under contract to the hospital.  Said regulations shall be effective beginning on October 1, 2011.