BILL NUMBER: ABX1 1 AMENDED
BILL TEXT
AMENDED IN SENATE JANUARY 16, 2008
AMENDED IN ASSEMBLY DECEMBER 17, 2007
AMENDED IN ASSEMBLY DECEMBER 13, 2007
AMENDED IN ASSEMBLY NOVEMBER 8, 2007
INTRODUCED BY Assembly Member Nunez
(Principal coauthor: Senator Perata)
SEPTEMBER 11, 2007
An act to amend Section 2069 of, to add Sections 4040.1, 4071.2,
4071.3, and 4071.4 to, and to add and repeal Section 2838 of, the
Business and Professions Code, to add Section 49452.9 to the
Education Code, to add Sections 12803.2, 12803.25, 22830.5, and
22830.6 to, and to add Chapter 15 (commencing with Section 8899.50)
to Division 1 of Title 2 of, the Government Code, to amend Sections
1357.54, 1365, 124900, 124905, 124910, 124920, 128745, and 128748 of,
to amend, repeal, and add Section 1399.56 of, to add Sections
1262.9, 1342.9, 1347, 1356.2, 1367.16, 1367.205, 1367.38, 1368.025,
1378.1, 1395.2, 1399.58, 104376, 124905.1, 124946, and 130545 to, to
add Chapter 1.6 (commencing with Section 155) to Part 1 of Division 1
of, to add Article 11.6 (commencing with Section 1399.820) to
Chapter 2.2 of Division 2 of, to add Article 1 (commencing with
Section 104250) to Chapter 4 of Part 1 of Division 103 of, to add
Article 3 (commencing with Section 104705) to Chapter 2 of Part 3 of
Division 103 of, and to add Chapter 4 (commencing with Section
128850) to Part 5 of Division 107 of, the Health and Safety Code, to
amend Sections 12693.43, 12693.70, 12693.73, and 12693.76 of, to
amend, repeal, and add Section 796.02 of, to add Sections 796.05,
10113.10, 10113.11, 10123.56, 10176.15, 10273.6, 12693.56, 12693.57,
12693.58, 12693.59, 12693.766, 12886, and 12887 to, to add Chapter
9.6 (commencing with Section 10919) to Part 2 of Division 2 of, and
to add Part 6.45 (commencing with Section 12699.201) and Part 6.7
(commencing with Section 12739.50) to Division 2 of, the Insurance
Code, to add Section 96.8 to the Labor Code, to amend Sections 19167
and 19611 of, to add Sections 17052.31, 17052.32, 19528.5, and
19553.5 to, and to add and repeal Section 17052.30 of, the Revenue
and Taxation Code, to add Sections 301.1 and 1120 to, and to add
Division 1.2 (commencing with Section 4800) to, the Unemployment
Insurance Code, and to amend Sections 12306.1, 14005.30, and 14011.16
of, to add Sections 14005.301, 14005.305, 14005.306, 14005.310,
14005.311, 14005.331, 14005.333, 14011.16.1, 14074.5, 14081.6,
14092.5, 14132.105, and 14137.10 to, and to add Article 5.215
(commencing with Section 14167.22) to, and to add and repeal Article
5.21 (commencing with Section 14167.1) of, Chapter 7 of Part 3 of
Division 9 of, the Welfare and Institutions Code, relating to health
care coverage.
LEGISLATIVE COUNSEL'S DIGEST
AB 1, as amended, Nunez. Health care reform.
(1) Existing law creates the California Health and Human Services
Agency.
This bill would require the agency, in consultation with the Board
of Administration of the Public Employees' Retirement System (PERS),
to assume lead agency responsibility for professional review and
development of best practice standards for high-cost chronic diseases
that state health care programs would be required to implement upon
their adoption. The bill would additionally require the agency, in
consultation with PERS and health care provider groups, to develop
health care provider performance measurement benchmarks, as
specified.
The bill, effective July 1, 2008, would create the California
Health Care Cost and Quality Transparency Committee in the California
Health and Human Services Agency, with various powers and duties,
including the development and periodic review of a health care cost
and quality transparency plan. The bill would require the Office of
Statewide Health Planning and Development to assist the committee in
that regard. The bill would require the Secretary of California
Health and Human Services to track and assess the effects of health
care reform and to report to the Legislature by March 1, 2012, and
biennially thereafter. The bill would also create the California
Health Benefits Service within the State Department of Health Care
Services, with various powers and duties relative to creation of
joint ventures between certain county-organized health plans and
various other entities. The bill would require these joint ventures
to be licensed as health care service plans and would create a
stakeholder committee.
(2) Existing law does not provide a system of health care coverage
for all California residents. Existing law does not require
employers to provide health care coverage for employees and
dependents, other than coverage provided as part of the workers'
compensation system for work-related employee injuries, and does not
require individuals to maintain health care coverage. Existing law
provides for the creation of various programs to provide health care
coverage to persons who have limited incomes and meet various
eligibility requirements. These programs include the Healthy Families
Program, administered by the Managed Risk Medical Insurance Board,
and the Medi-Cal program, administered by the State Department of
Health Care Services and county welfare departments.
This bill would require California residents, subject to certain
exceptions, to enroll in and maintain at least minimum creditable
health care coverage, as determined by the Managed Risk Medical
Insurance Board, for themselves and their dependents, as defined. The
bill would require the board to establish, by regulation, the
definition and standards for minimum creditable coverage, including
an affordability standard and hardship exemptions, by March 1, 2009,
and would require the board to facilitate enrollment in public or
private coverage and to establish an education and awareness program,
by January 1, 2010, relating to the requirement to obtain minimum
creditable coverage. The bill would enact related provisions,
including authorizing a school district, on and after January 1,
2010, to provide parents and guardians information explaining these
health care coverage requirements.
The bill would, as of January 1, 2009, create the California
Cooperative Health Insurance Purchasing Program (Cal-CHIPP), which
would function as a statewide purchasing pool for health care
coverage and be administered by the Managed Risk Medical Insurance
Board. The bill would specify eligibility for Cal-CHIPP and would
require the board to develop and offer a variety of benefit plan
designs, including the Cal-CHIPP Healthy Families plan in which
enrollment would be restricted to specified low-income persons. The
bill would authorize an employer to pay all or a part of the premium
payment required of its employees enrolled in Cal-CHIPP. The bill
would make it an unfair labor practice for an employer to refer an
employee, or his or her dependent, to Cal-CHIPP or to arrange for
their application to that program to separate them from group
coverage provided through the employment relationship, and for an
employer to change the share-of-cost ratio or modify coverage in
order for an employee or his or her dependents to enroll in that
program. Because an unfair labor practice may be punishable as a
crime, the bill would impose a state-mandated local program. The bill
would create the California Health Trust Fund in the State Treasury
for the purposes of this act. The bill would require the State
Department of Health Care Services to seek any necessary federal
approval to enable the state to receive federal Medicaid funds for
specified persons who could otherwise be made eligible for Medi-Cal
benefits, with the state share of funds to be provided from the
California Health Trust Fund. The bill, on and after July 1, 2010,
would also extend Medi-Cal benefits to parents and caretaker
relatives and various other persons meeting certain eligibility
requirements. The bill would require certain of these individuals to
receive their benefits in the form of a benchmark package, which
would be the Cal-CHIPP Healthy Families benefit package. The bill
would provide for the benchmark benefits to be administered by the
Managed Risk Medical Insurance Board, pursuant to an interagency
agreement with the department. The bill would make these provisions
subject to federal financial participation and approval, as
specified.
The bill would require the State Department of Health Care
Services to establish a Healthy Action Incentives and Rewards Program
to be provided as a covered benefit under the Medi-Cal program,
subject to federal financial participation and approval. The bill
would also require the Director of Health Care Services to establish
a local coverage option program for low-income adults that would be
the exclusive Medi-Cal coverage for a 4-year period beginning with
the program's commencement, for county residents who, among other
requirements, have a family income at or below 100% of the federal
poverty level and are not otherwise eligible for the Medi-Cal
program. The bill would specify that the program would become
operational for services rendered on or after July 1, 2010. The bill
would specify that coverage under the program would be provided at a
county's option and only by a county that operates a designated
public hospital, subject to approval by the State Department of
Health Care Services and contingent on establishment of a county
share of cost. The bill would require the State Department of Health
Care Services, by January 1, 2010, to contract with an independent
3rd party to develop an assessment tool to measure the care provided
under the program. The bill would require the department, after 3
years of the program's operation, to evaluate the program using the
assessment tool and would extend the program for an additional 2
years if the program substantially met certain criteria and would
terminate the program if it did not. The bill would enact other
related provisions.
The bill, subject to future appropriation of funds, would expand
the number of children eligible for coverage under the Healthy
Families Program on and after July 1, 2009. The bill would, on and
after July 1, 2009, delete as an eligibility requirement for a child
under the Healthy Families Program and the Medi-Cal program that the
child satisfy citizen and immigration status requirements applicable
to the programs under federal law, thereby creating a state-only
element of the programs. The bill would additionally, on and after
July 1, 2009, disregard all income over 250% but less than or equal
to 300% of the federal poverty level and would apply Medi-Cal program
income deductions to a family income greater than 300% of the
federal poverty level in determining eligibility for the Healthy
Families Program. The bill would authorize the board to provide, or
arrange for the provision of, an electronic personal health record
under the Healthy Families Program, to the extent funds are
appropriated for that purpose, and would provide for the
confidentiality of information obtained pursuant to the program.
The bill would require the department to exercise its federal
option as necessary to simplify Medi-Cal eligibility by exempting all
resources for certain applicants and recipients, commencing July 1,
2010.
The bill would enact the Medi-Cal Physician Services Rate Increase
Act, which would establish, with respect to services rendered to
Medi-Cal beneficiaries on and after July 1, 2010, to the extent funds
are appropriated in the annual Budget Act, increased reimbursements
of up to 100% of the Medicare rate for physicians, physician groups,
as defined, and others that are enrolled Medi-Cal providers eligible
to receive payments for Medi-Cal services. The bill would permit some
of these rate increases to be linked to specified performance
measures and would provide that these rate increases would be
implemented only to the extent that state funds are appropriated for
the nonfederal share of these increases. The bill would require the
Director of Health Care Services to seek federal approval of the rate
methodology set forth in the act and would prohibit the methodology
from being implemented if federal approval is not obtained.
Because each county is required to determine eligibility for the
Medi-Cal program, expansion of program eligibility would impose a
state-mandated local program.
This bill would also enact the Medi-Cal Hospital Rate
Stabilization Act, which would revise the methodology by which safety
net care pool funds are paid to designated public hospitals for
providing uncompensated care to the uninsured. The bill would require
the State Department of Health Care Services to determine an
outpatient base rate and an inpatient base rate, as defined, for
various types of hospitals. The bill would also, commencing July 1,
2010, establish specified reimbursement rate methodologies under the
Medi-Cal program for hospital services, as defined, that are rendered
by designated public hospitals and for managed health care plans, as
specified, and would require managed health care plans to expend
100% of moneys received under the increased rates for payments to
hospitals for providing services to Medi-Cal patients. The bill would
make implementation of certain of these provisions contingent on the
establishment of certain requirements under which counties pay a
share of cost for persons enrolled in the Medi-Cal program, and would
make implementation of all of these provisions contingent on the
imposition of a 4% fee on the net patient revenue of general acute
care hospitals.
This bill would also require a portion of the nonfederal share of
the reimbursement for designated public hospitals be transferred to
the Workforce Development Program Fund, which the bill would create
in the State Treasury. Moneys in the fund would, upon appropriation,
be used exclusively for retraining county hospital and clinic systems'
health care workers and be allocated by the Office of Statewide
Health Planning and Development.
(3) Existing law provides for the county administered In-Home
Supportive Services (IHSS) program, under which qualified aged,
blind, and disabled persons are provided with services in order to
permit them to remain in their own homes and avoid
institutionalization.
Existing law permits services to be provided under the IHSS
program either through the employment of individual providers, a
contract between the county and an entity for the provision of
services, the creation by the county of a public authority, or a
contract between the county and a nonprofit consortium.
Existing law provides that when any increase in provider wages or
benefits is negotiated or agreed to by a public authority or
nonprofit consortium, the county shall use county only funds for the
state and county share of any increase in the program, unless
otherwise provided in the Budget Act or appropriated by statute.
Existing law establishes a formula with regard to provider wages
or benefits increases negotiated or agreed to by a public authority
or nonprofit consortium, and specifies the percentages required to be
paid by the state and counties, beginning with the 2000-01 fiscal
year, with regard to the nonfederal share of any increases.
This bill would revise the formula for state participation in
provider health benefit increases. The bill would also authorize a
county employee representative to elect to provide health benefits
through a trust fund, as specified.
(4) Existing law, the Knox-Keene Health Care Service Plan Act of
1975, provides for the licensure and regulation of health care
service plans by the Department of Managed Health Care and makes a
willful violation of the act a crime. Existing law also provides for
the regulation of health insurers by the Department of Insurance.
This bill would enact various health insurance market reforms, to
be operative on specified dates, including requirements for guarantee
issue of individual health care service plan contracts and health
insurance policies and other requirements relating to individual
coverage, modified disclosures, and other related changes. The bill,
on and after July 1, 2010, would require at least 85% of full-service
health care service plan dues, fees, and other periodic payments and
health insurance premiums to be spent on health care benefits and
not on administrative costs. The bill would allow a health care
service plan and a health insurer to provide notices by electronic
transmission using specified procedures.
The bill would require a health care service plan providing
prescription drug benefits and maintaining a drug formulary to,
commencing on or before January 1, 2010, make the most current
formularies available electronically to prescribers and pharmacies
and would require health care service plans that provide services to
certain beneficiaries under a Medi-Cal managed care program to be
subject solely to the filing, reporting, monitoring, and survey
requirements established by the State Department of Health Care
Services for the Medi-Cal managed care program for designated
subjects. The bill would require the department and the State
Department of Health Care Services to develop a joint filing and
review process for medical quality surveys.
The bill would also require group health care service plan
contracts and group health insurance policies offered, amended, or
renewed on or after January 1, 2009, to offer to include a Healthy
Action Incentives and Rewards Program, as specified. The bill would
also authorize an employer to provide health coverage that includes a
Healthy Action Incentives and Rewards Program to his or her
employees.
Because a willful violation of the bill's requirements relative to
health care service plans would be a crime, the bill would impose a
state-mandated local program.
(5) The Personal Income Tax Law authorizes various credits against
the taxes imposed by that law.
This bill would, for taxable years beginning on or after January
1, 2010, and before January 1, 2015, allow to a qualified taxpayer,
as defined, a refundable credit against those taxes in an amount
equal to those qualified health care plan premium costs, as defined,
that are in excess of 5.5% of a qualified taxpayer's adjusted gross
income for the taxable year, except as provided. This bill would,
upon appropriation by the Legislature, require that all amounts
deposited into the California Health Trust Fund be transferred to the
Managed Risk Medical Insurance Board for purposes of advancing the
refundable credit and to the Franchise Tax Board for purposes of
recovering amounts expended for the refunds, as provided.
(6) Existing law creates the Employment Development Department in
the Labor and Workforce Development Agency and vests that department
with the duties, purposes, responsibilities, and jurisdiction
previously exercised by the State Department of Benefit Payments or
the California Health and Human Services Agency with respect to job
creation activities.
This bill would require the department to establish data
collection and reporting methods and requirements, as specified, to
collect and report information related to employer health
expenditures on behalf of their employees. The bill would require the
department to report on that data to the Managed Risk Medical
Insurance Board and the Legislature on an annual basis commencing
April 1, 2011, and would authorize the department to adopt
regulations to implement these provisions.
(7) Under existing federal law, a cafeteria plan is a written plan
through which employees choose among 2 or more benefits consisting
of cash and qualified benefits. Existing federal law provides that,
except as specified, no amount is included in the gross income of a
participant in a cafeteria plan solely because the participant may
choose among the benefits of the plan.
This bill would, beginning January 1, 2010, require an employer to
adopt and maintain a cafeteria plan to allow employees to pay
premiums for health care coverage to the extent amounts for that
coverage are excludable from the gross income of the employee, as
specified. The bill would require an employer who fails to establish
or maintain a cafeteria plan to pay a penalty of $100 or $500 per
employee, as specified.
(8) Existing law authorizes the Board of Administration of the
Public Employees' Retirement System to contract with carriers
offering health benefit plans for coverage for eligible employees and
annuitants.
This bill would require the board, on or before January 1, 2010,
to provide or arrange for the provision of an electronic personal
health record for enrollees receiving health care benefits.
(9) Existing law establishes the State Department of Public
Health, which licenses and regulates health facilities and also
administers funds for programs relating to smoking cessation. Under
existing law, a noncontracting hospital is required to contact an
enrollee's health care service plan to obtain the enrollee's medical
record information prior to admitting the enrollee for inpatient
poststabilization care, as defined, or prior to transferring the
enrollee, if certain conditions apply. Existing law prohibits the
hospital from billing the enrollee for poststabilization care if it
is required to, and fails to, contact the enrollee's health care
service plan. Under existing law, a violation of any of these
provisions is punishable as a misdemeanor.
This bill would prohibit a noncontracting hospital, as defined,
from billing a covered patient for emergency health care services and
poststabilizing care except for applicable copayments and cost
shares. By changing the definition of an existing crime, this bill
would impose a state-mandated local program.
The bill would also require the department to maintain the
California Diabetes Program to provide information and assistance
pertaining to the prevention and treatment of diabetes. The bill
would also establish the Comprehensive Diabetes Services Program in
the State Department of Health Care Services to provide diabetes
prevention and management services to certain beneficiaries in the
Medi-Cal program, to the extent funding is available for this
purpose. The bill would also require the department, in consultation
with the Department of Managed Health Care, the State Department of
Health Care Services, the Managed Risk Medical Insurance Board, and
the Department of Insurance, to annually identify the 10 largest
providers of health care coverage in the state, to ascertain and
summarize the smoking cessation benefits provided by those coverage
providers, to publish the benefit summary on the department's
Internet Web site, to include the benefit summary as part of its
preventive health education against tobacco use campaign, and to
evaluate any changes in connection with the smoking cessation
benefits provided by the coverage providers, as provided. The bill
would also require the department, to the extent that funds are
available and appropriated for this purpose, to increase the capacity
of effective smoking cessation services available from, and expand
the awareness of, services available through, the California Smokers'
Helpline, as prescribed.
The bill would also create the Community Makeover Grant program
that would be administered by the department and would require it to
award grants to local health departments in cities and counties,
which would serve as the local lead agencies in administering the
program, for the purpose of developing new programs or improving
existing programs that promote active living and healthy eating. The
bill would require the department to issue guidelines and to specify
data reporting requirements for local lead agencies to comply with
various requirements relating to the administration of the program.
The bill would also require the department to develop a sustained
media campaign to educate the public about the importance of obesity
prevention.
(10) Existing law requires the State Department of Health Care
Services to select certain primary care clinics to be reimbursed for
delivering medical services, including preventive health care and
smoking prevention and cessation health education, to program
beneficiaries, based upon specified criteria. Existing law requires
that a clinic meet specified requirements in order to receive a
reimbursement. Under existing law, a program beneficiary is a person
whose income is at or below 200% of the federal poverty level.
Existing law requires the department to utilize existing contractual
claims processing services to promote efficiency and maximize the use
of funds.
This bill would additionally require that, in order receive a
reimbursement, a clinic serve as a designated primary care medical
home for program beneficiaries, as specified. The bill would also
revise the definition of program beneficiary to mean a person whose
income is at or below 250% of the poverty level and who either does
not have private or employer-based health care coverage or is not
enrolled in or is ineligible for public health care coverage
programs. This bill would delete the provision requiring the
department to utilize existing contractual claims processing services
and instead authorize the department to contract with public and
private entities or utilize existing health care service provider
enrollment and payment mechanisms in order to perform its duties, as
specified. The bill would additionally require that the department
maximize the availability of federal funding for services provided
pursuant to these provisions. The bill would make related changes.
(11) Existing law provides for the Office of Statewide Health
Planning and Development, which has specified powers and duties.
Existing law requires the office to publish specified reports.
This bill would require the office to publish risk-adjusted
outcome reports for percutaneous coronary interventions, commencing
January 1, 2010, and would require the office to establish a clinical
data collection program to collect data on percutaneous coronary
interventions and establish by regulation the data to be reported by
each hospital.
(12) Existing law provides for the certification and regulation of
nurses, including nurse practitioners and nurse-midwives, by the
Board of Registered Nursing and for the licensure and regulation of
physician assistants by the Physician Assistant Committee of the
Medical Board of California. Existing law provides that a medical
assistant may administer medication upon the specific authorization
and supervision of a licensed physician and surgeon or licensed
podiatrist or, in specified clinic settings, upon the specific
authorization and supervision of a nurse practitioner, nurse-midwife,
or physician assistant.
This bill would remove the requirement that a medical assistant's
administration of medication upon the specific authorization and
supervision of a nurse practitioner, nurse-midwife, or physician
assistant occur in specified clinic settings, and would make related
changes.
(13) Existing law, the Nursing Practice Act, provides for the
licensure and regulation of nurse practitioners by the Board of
Registered Nursing which is within the Department of Consumer
Affairs.
This bill would, until July 1, 2011, create the Task Force on
Nurse Practitioner Scope of Practice that would consist of specified
members appointed by the Governor, the Speaker of the Assembly, and
the Senate Committee on Rules. The bill would make the task force
responsible for developing a recommended scope of practice for nurse
practitioners and would require the task force to report the
recommended scope of practice to the Governor and the Legislature on
or before June 30, 2009. The bill would require the Director of
Consumer Affairs, on or before July 1, 2010, to promulgate
regulations that adopt the recommended scope of practice. The bill
would require the aforementioned boards to pay the state
administrative costs of implementing these provisions.
(14) Existing law, the Pharmacy Law, defines an electronic
transmission prescription and sets forth the requirements for those
types of prescriptions.
This bill would require electronic prescribing systems to meet
specified standards and requirements and would require a prescriber
or prescriber's authorized agent to offer patients a written receipt
of information transmitted electronically, including the patient's
name and the drug prescribed, and would require the State Department
of Health Care Services to develop a pilot program to foster the
adoption and use of electronic prescribing by health care providers
that contract with the Medi-Cal program, as specified. The bill would
require every licensed prescriber, or prescriber's authorized agent,
or pharmacy operating in California, on or before January 1, 2010,
to have the ability to transmit and receive prescriptions by
electronic data transmission.
(15) This bill would give the State Department of Health Care
Services, in consultation with the Department of Finance, authority
to take various actions as necessary to implement the bill, including
promoting flexibility of implementation and maximizing federal
financial participation. The bill would require the Director of
Health Care Services to notify the Chair of the Joint Legislative
Budget Committee prior to exercising this flexibility. The bill would
declare the intent of the Legislature to implement the bill to
harmonize and best effectuate the purposes and intent of the bill.
(16) This
bill would declare the Legislature's intent that the act's provisions
be financed by contributions from various sources, including
payments by acute care hospitals and employers, and by increasing the
taxes on cigarettes and other tobacco products.
(17) The bill would make its provisions operative upon the date
that the Director of Finance files a finding with the Secretary of
State that, among other circumstances, sufficient state resources
will exist in the Health Care Trust Fund to implement those
provisions. The bill would also require the director to transmit that
finding to the Chief Clerk of the Assembly, the Secretary of the
Senate, and the chairs of the appropriate committees of the
Legislature at least 90 days prior to implementation of its
provisions.
(18) The bill would require that all of its provisions become
inoperative, as specified, if any portion of the bill is held to be
invalid, as determined by a final judgment of a court of competent
jurisdiction.
(19) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that with regard to certain mandates no
reimbursement is required by this act for a specified reason.
With regard to any other mandates, this bill would provide that,
if the Commission on State Mandates determines that the bill contains
costs so mandated by the state, reimbursement for those costs shall
be made pursuant to the statutory provisions noted above.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. This act shall be known and may be cited as the Health
Care Security and Cost Reduction Act.
SEC. 2. It is the intent of the Legislature to accomplish the goal
of universal health care for all California residents. To accomplish
this goal, the Legislature proposes to take all of the following
steps:
(a) Ensure that all Californians have access to affordable,
comprehensive health care.
(b) Leverage available federal funds to the greatest extent
possible through existing federal programs.
(c) Maintain and strengthen the health insurance system and
improve availability and affordability of private health care
coverage for all purchasers through (1) insurance market reforms; (2)
enhanced access to effective primary and preventive services,
including management of chronic illnesses; (3) promotion of
cost-effective health technologies; and (4) implementation of
meaningful, systemwide cost containment strategies.
(d) Engage in early and systematic evaluation at each step of the
implementation process to identify the impacts on state costs, the
costs of coverage, employment and insurance markets, health delivery
systems, quality of care, and overall progress in moving toward
universal coverage.
SEC. 3. Section 2069 of the Business and Professions Code is
amended to read:
2069. (a) (1) Notwithstanding any other provision of law, a
medical assistant may administer medication only by intradermal,
subcutaneous, or intramuscular injections and perform skin tests and
additional technical supportive services upon the specific
authorization and supervision of a licensed physician and surgeon,
nurse practitioner, nurse-midwife, physician assistant, or licensed
podiatrist.
(2) The licensed physician and surgeon may, at his or her
discretion, in consultation with the nurse practitioner,
nurse-midwife, or physician assistant, provide written instructions
to be followed by a medical assistant in the performance of tasks or
supportive services. These written instructions may provide that the
supervisory function for the medical assistant for these tasks or
supportive services may be delegated to the nurse practitioner,
nurse-midwife, or physician assistant within the standardized
procedures or protocol, and that tasks may be performed when the
licensed physician and surgeon is not onsite, so long as the
following apply:
(A) The nurse practitioner or nurse-midwife is functioning
pursuant to standardized procedures, as defined by Section 2725, or
protocol. The standardized procedures or protocol shall be developed
and approved by the supervising physician and surgeon, the nurse
practitioner or nurse-midwife, and the facility administrator or his
or her designee.
(B) The physician assistant is functioning pursuant to regulated
services defined in Section 3502 and is approved to do so by the
supervising physician or surgeon.
(b) As used in this section and Sections 2070 and 2071, the
following definitions shall apply:
(1) "Medical assistant" means a person who may be unlicensed, who
performs basic administrative, clerical, and technical supportive
services in compliance with this section and Section 2070 for a
licensed physician and surgeon or a licensed podiatrist, or group
thereof, for a medical, nursing, or podiatry corporation, for a
physician assistant, a nurse practitioner, or a nurse-midwife as
provided in subdivision (a), or for a health care service plan, who
is at least 18 years of age, and who has had at least the minimum
amount of hours of appropriate training pursuant to standards
established by the Division of Licensing. The medical assistant shall
be issued a certificate by the training institution or instructor
indicating satisfactory completion of the required training. A copy
of the certificate shall be retained as a record by each employer of
the medical assistant.
(2) "Specific authorization" means a specific written order
prepared by the licensed physician and surgeon, nurse practitioner,
nurse-midwife, physician assistant, or licensed podiatrist
authorizing the procedures to be performed on a patient, which shall
be placed in the patient's medical record, or a standing order
prepared by the licensed physician and surgeon, nurse practitioner,
nurse-midwife, physician assistant, or licensed podiatrist,
authorizing the procedures to be performed, the duration of which
shall be consistent with accepted medical practice. A notation of the
standing order shall be placed on the patient's medical record.
(3) "Supervision" means the supervision of procedures authorized
by this section by the following practitioners, within the scope of
their respective practices, who shall be physically present in the
treatment facility during the performance of those procedures:
(A) A licensed physician and surgeon.
(B) A licensed podiatrist.
(C) A physician assistant, nurse practitioner, or nurse-midwife.
(4) "Technical supportive services" means simple routine medical
tasks and procedures that may be safely performed by a medical
assistant who has limited training and who functions under the
supervision of a licensed physician and surgeon, a licensed
podiatrist, a physician assistant, a nurse practitioner, or a
nurse-midwife.
(c) Nothing in this section shall be construed as authorizing the
licensure of medical assistants. Nothing in this section shall be
construed as authorizing the administration of local anesthetic
agents by a medical assistant. Nothing in this section shall be
construed as authorizing the division to adopt any regulations that
violate the prohibitions on diagnosis or treatment in Section 2052.
(d) Notwithstanding any other provision of law, a medical
assistant may not be employed for inpatient care in a licensed
general acute care hospital as defined in subdivision (a) of Section
1250 of the Health and Safety Code.
(e) Nothing in this section shall be construed as authorizing a
medical assistant to perform any clinical laboratory test or
examination for which he or she is not authorized by Chapter 3
(commencing with Section 1200). Nothing in this section shall be
construed as authorizing a nurse practitioner, nurse-midwife, or
physician assistant to be a laboratory director of a clinical
laboratory, as those terms are defined in paragraph (7) of
subdivision (a) of Section 1206 and subdivision (a) of Section 1209.
SEC. 5. Section 2838 is added to the Business and Professions
Code, to read:
2838. (a) The Task Force on Nurse Practitioner Scope of Practice
is hereby created and shall consist of the following members:
(1) The Director of Consumer Affairs, who shall serve as an ex
officio member of the task force and shall cast the deciding vote in
any matter voted upon by the task force that results in a tie vote.
(2) Three members of the Medical Board of California, two of whom
shall be appointed to the task force by the Governor, and one of whom
shall be appointed to the task force by the Speaker of the Assembly.
(3) Three members of the Board of Registered Nursing, two of whom
shall be appointed to the task force by the Governor, and one of whom
shall be appointed to the task force by the Senate Committee on
Rules.
(4) Two representatives of an institution of higher education, who
shall be appointed to the task force by the Governor as nonvoting
members.
(b) The duty of the task force shall be to develop a recommended
scope of practice for nurse practitioners.
(c) The task force shall report its recommended scope of practice
for nurse practitioners to the Governor and the Legislature on or
before June 30, 2009.
(d) On or before July 1, 2010, the Director of Consumer Affairs
shall promulgate regulations consistent with existing law
that adopt the task force's recommended scope of practice.
(e) The Medical Board of California and the Board of Registered
Nursing shall pay the state administrative costs of implementing this
section.
(f) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that is enacted before January 1, 2012, deletes or extends the dates
on which it becomes inoperative and is repealed.
SEC. 7. Section 4040.1 is added to the Business and Professions
Code, to read:
4040.1. (a) Electronic prescribing shall not interfere with a
patient's existing freedom to choose a pharmacy, and shall not
interfere with the prescribing decision at the point of care.
(b) Notwithstanding subdivision (c) of Section 4040, "electronic
prescribing" or "e-prescribing" means a prescription or
prescription-related information transmitted between the point of
care and the pharmacy using electronic media.
SEC. 8. Section 4071.2 is added to the Business and Professions
Code, to read:
4071.2. (a) On or before January 1, 2012, every licensed
prescriber, prescriber's authorized agent, or pharmacy operating in
California shall have the ability to transmit and receive
prescriptions by electronic data transmission.
(b) The Medical Board of California, the State Board of Optometry,
the Bureau of Naturopathic Medicine, the Dental Board of California,
the Osteopathic Medical Board of California, the Board of Registered
Nursing, and the Physician Assistant Committee shall have authority
with the California State Board of Pharmacy to ensure compliance with
this section, and those boards are specifically charged with the
enforcement of this section with respect to their respective
licensees.
(c) Nothing in this section shall be construed to diminish or
modify any requirements or protections provided for in the
prescription of controlled substances as otherwise established by
this chapter or by the California Uniform Controlled Substances Act
(Division 10 (commencing with Section 11000) of the Health and Safety
Code).
SEC. 9. Section 4071.3 is added to the Business and Professions
Code, to read:
4071.3. Every electronic prescription system shall meet all of
the following requirements:
(a) Comply with nationally recognized or certified standards for
data exchange or be accredited by a recognized accreditation
organization.
(b) Allow real-time verification of an individual's eligibility
for benefits and whether the prescribed medication is a covered
benefit.
(c) Comply with applicable state and federal confidentiality and
data security requirements.
(d) Comply with applicable state record retention and reporting
requirements.
SEC. 10. Section 4071.4 is added to the Business and Professions
Code, to read:
4071.4. A prescriber or prescriber's authorized agent using an
electronic prescription system shall offer patients a written receipt
of the information that has been transmitted electronically to the
pharmacy. The receipt shall include the patient's name, the dosage
and drug prescribed, the name of the pharmacy where the electronic
prescription was sent, and shall indicate that the receipt cannot be
used as a duplicate order for the same medicine.
SEC. 11. Section 49452.9 is added to the Education Code, to read:
49452.9. (a) On and after January 1, 2010, the school district
may provide an information sheet regarding health insurance
requirements to the parent or guardian of all of the following:
(1) A pupil enrolled in kindergarten.
(2) A pupil enrolled in first grade if the pupil was not
previously enrolled in kindergarten.
(3) A pupil enrolled during the course of the year in the case of
children who have recently arrived, and intend to remain, in
California.
(b) The information sheet described in subdivision (a) shall
include all of the following:
(1) An explanation of the health insurance requirements under
Section 8899.50 of the Government Code.
(2) Information on the important relationship between health and
learning.
(3) A toll-free telephone number to request an application for
Healthy Families, Medi-Cal, or other government-subsidized health
insurance programs.
(4) Contact information for county public health departments.
(5) A statement of privacy applicable under state and federal laws
and regulations.
(c) By January 1, 2010, the State Department of Education shall,
in consultation with the State Department of Health Care Services and
the Managed Risk Medical Insurance Board, develop a standardized
template for the information sheet required by this section. To the
extent possible, the information provided pursuant to this section
shall be consolidated with the information listed in subdivision (c)
of Section 49452.8 into one document. The State Department of
Education shall make the template available on its Internet Web site
and shall, upon request, provide written copies of the template to a
school district.
SEC. 12. Chapter 15 (commencing with Section 8899.50) is added to
Division 1 of Title 2 of the Government Code, to read:
CHAPTER 15. MINIMUM HEALTH CARE COVERAGE
8899.50. (a) On and after July 1, 2010, every California resident
shall be enrolled in and maintain at least minimum creditable
coverage, as defined by the Managed Risk Medical Insurance Board
pursuant to Section 12739.50 of the Insurance Code, unless otherwise
exempt pursuant to subdivision (d).
(b) On and after July 1, 2010, a subscriber shall obtain and
maintain at least minimum creditable coverage, as defined by the
Managed Risk Medical Insurance Board, for any person who qualifies as
his or her dependent. For purposes of this chapter, the term
"dependent" means the spouse, registered domestic partner, minor
child of the subscriber, or a child 18 years of age and over who is
dependent on the subscriber, as defined by the Managed Risk Medical
Insurance Board.
(c) Notwithstanding subdivisions (a) and (b), compliance with
those subdivisions shall not be required until Sections 12739.50,
12739.51, and 12699.211.01 of the Insurance Code, Section 17052.30 of
the Revenue and Taxation Code, and Sections 14005.301 and 14005.305
of the Welfare and Institutions Code are implemented, and only so
long as these sections remain operative, and the Managed Risk Medical
Insurance Board has defined by regulation the minimum creditable
coverage that will satisfy the requirements of this section.
(d) An individual shall not be subject to the requirements of
subdivisions (a) and (b) if the Managed Risk Medical Insurance Board,
pursuant to Section 12739.501 of the Insurance Code, determines that
health care coverage meeting the definition of minimum creditable
coverage is not affordable for that individual or that the purchase
of minimum creditable coverage would constitute an undue hardship for
that individual, or if the person or family has an income at or
below 250 percent of the federal poverty level and the person's or
family's share of the premium for minimum creditable coverage exceeds
5 percent of his or her family's income.
(e) An individual shall not be subject to the requirements of
subdivisions (a) and (b) if the individual has been in California for
six months or less and is not eligible for guaranteed issue of
health care coverage under Section 1399.829 of the Health and Safety
Code or Section 10928 of the Insurance Code.
(f) "California resident" means an individual who is a resident of
the state pursuant to Section 244 or is physically present in the
state for at least six months, having entered the state with an
employment commitment or to obtain employment, whether or not
employed at the time of application for health care coverage or after
acceptance.
(g) "Subscriber" means an individual with dependents, as
determined by the Managed Risk Medical Insurance Board consistent
with subdivision (b), who is generally eligible to enroll dependents
for health care coverage purposes, including, but not limited to, an
individual whose employment status, or status as head of household,
parent, spouse, or other status, makes the individual eligible to
enroll his or her dependents for health care coverage purposes.
8899.501. For purposes of subdivisions (e) and (f) of Section
8899.50, subdivision (d) of Section 1399.836 of the Health and Safety
Code, and subdivision (g) of Section 10928 of the Insurance Code,
the reference to an individual or person who has been a resident of
California for six months or less and the definition of "California
resident" as an individual who is a resident of the state for at
least six months shall mean a six-month period or any lesser period
required by federal and state law.
SEC. 13. Section 12803.2 is added to the Government Code, to read:
12803.2. The California Health and Human Services Agency, in
consultation with the Board of Administration of the Public Employees'
Retirement System, and after consultation with affected health care
provider groups, shall develop health care provider performance
measurement benchmarks and incorporate these benchmarks into a common
pay-for-performance model to be offered in every state-administered
health care program, including, but not limited to, the Public
Employees' Medical and Hospital Care Act, the Healthy Families
Program, the Major Risk Medical Insurance Program, the Medi-Cal
program, and the California Cooperative Health Insurance Purchasing
Program. These benchmarks shall be developed to advance a common
statewide framework for health care quality measurement and
reporting, including, but not limited to, measures that have been
approved by the National Quality Forum (NQF) such as the Health Plan
Employer Data and Information Set (HEDIS) and the Joint Commission on
Accreditation of Health Care Organizations (JCAHO), and that have
been adopted by the Hospitals Quality Alliance and other national and
statewide groups concerned with quality. The provisions of Section
14167.25 of the Welfare and Institutions Code shall be implemented in
addition to the requirements of this section in such a manner that
they are appropriately integrated with the pay-for-performance model
required under this section.
SEC. 14. Section 12803.25 is added to the Government Code, to
read:
12803.25. (a) The Secretary of California Health and Human
Services, in collaboration with other relevant state agencies, shall
track and assess the effects of health care reform as set forth in
the act enacting this section. The secretary shall either complete
the assessment or contract for its preparation. The secretary may
seek other sources of funding, including grants, to fund the
assessment. The assessment shall include, at minimum, the following
components:
(1) An assessment of the sustainability and solvency of the
program established pursuant to Part 6.45 (commencing with Section
12699.201) of Division 2 of the Insurance Code. This assessment shall
include data regarding persons purchasing health care coverage
through that program.
(2) An assessment of the cost and affordability of health care in
California. This assessment shall include the cost of health care
coverage products for individuals and families obtained through
employers, city and county governments, the Medi-Cal program, the
Healthy Families Program, the Public Employees' Medical and Hospital
Care Act, Medicare Advantage plans, and the individual market.
(3) An assessment of the health care coverage market in
California, including a review of the various insurers and health
care service plans, their offerings, their efficiency in providing
health care services, and their financial conditions, including their
medical loss ratios.
(4) An assessment of the effect on employers and employment,
including employer administrative costs, employee turnover rate, and
wages categorized by the type of employer and the size of the
business. The assessment shall also review if there have been
significant changes to the labor market and increased underground
economy activity.
(5) An assessment of the racial and ethnic disparities in access
and availability of health care, including cultural competency and
language access, and what effects the act adding this section has had
in reducing these disparities.
(6) An assessment of the change in access and availability of
health care coverage throughout the state, including tracking the
availability of health care coverage products in rural and other
underserved areas of the state and assessing the adequacy of the
health care delivery infrastructure to meet the need for health care
services. This assessment shall include a more in-depth review of
areas of the state that were determined to be medically underserved
in 2007.
(7) An assessment of the impact on the county health care safety
net system, including a review of the amount of uncompensated care
and emergency room use.
(8) An overall assessment of health care coverage.
(9) An assessment of the capacity of the various health care
professions and facilities to provide care to Californians.
(b) An advisory body of individuals with knowledge and expertise
in health care policy and financing shall provide input on the
assessment described in subdivision (a). The Governor shall appoint
five members to the advisory body, the Senate Committee on Rules
shall appoint two members, and the Speaker of the Assembly shall
appoint two members.
(c) To the extent possible, the assessment described in
subdivision (a) shall maximize the use of current surveys and
databases.
(d) To the extent feasible, in order to track the effect of health
care reform on ongoing trends in the health care field, the
assessment described in subdivision (a) shall include data from years
prior to the enactment of the program established pursuant to Part
6.45 (commencing with Section 12699.201) of Division 2 of the
Insurance Code.
(e) All state agencies shall cooperate with the secretary in
implementing the provisions of this section.
(f) The Secretary of California Health and Human Services shall
submit the assessment described in subdivision (a) to the appropriate
policy and fiscal committees of the Legislature on or before March
1, 2012. The secretary shall update the assessment biennially.
SEC. 15. Section 22830.5 is added to the Government Code, to read:
22830.5. (a) On or before January 1, 2010, the board shall
provide or arrange for the provision of an electronic personal health
record for enrollees receiving health care benefits. The record
shall be provided for the purpose of providing enrollees with
information to assist them in understanding their coverage benefits
and managing their health care.
(b) At a minimum, the personal health record shall provide access
to real-time, patient-specific information regarding eligibility for
covered benefits and cost sharing requirements. Such access can be
provided through the use of an Internet-based system.
(c) In addition to the data required pursuant to subdivision (b),
the board may determine that the personal health record shall also
incorporate additional data, such as laboratory results, prescription
history, claims history, and personal health information authorized
or provided by the enrollee. Inclusion of this additional data shall
be at the option of the enrollee.
(d) Systems or software that pertain to the personal health record
shall adhere to accepted national standards for interoperability,
privacy, and data exchange, or shall be certified by a nationally
recognized certification body.
(e) The personal health record shall comply with applicable state
and federal confidentiality and data security requirements.
SEC. 16. Section 22830.6 is added to the Government Code, to read:
22830.6. On or before January 1, 2010, the board shall provide or
arrange for the provision of a Healthy Action Incentives and Rewards
Program, as described in subdivision (c) of Section 1367.38 of the
Health and Safety Code, to all enrollees.
SEC. 17. Chapter 1.6 (commencing with Section 155) is added to
Part 1 of Division 1 of the Health and Safety Code, to read:
CHAPTER 1.6. CALIFORNIA HEALTH BENEFITS SERVICE
155. (a) The California Health Benefits Service Program is hereby
created within the State Department of Health Care Services for the
purposes of expanding cost-effective health coverage options to
purchasers governed by the Health Care Security and Cost Reduction
Act. The program shall do all of the following:
(1) Identify statutory, regulatory, or financial barriers or
incentives that should be addressed to facilitate the establishment
and maintenance of one or more joint ventures between health plans
that contract with, or are governed, owned, or operated by, a county
board of supervisors, a county special commission, a county-organized
health system or a county health authority authorized by Section
14018.7, 14087.31, 14087.35, 14087.36, 14087.38, 14087.96 or Article
2.8 (commencing with Section 14087.5) of Chapter 7 of Division 9 of
Part 3 of the Welfare and Institutions Code, as well as the County
Medical Services Program.
(2) Identify statutory, regulatory, or financial barriers or
incentives that should be addressed before joint ventures among these
health plans may be formed, or existing health plans or the County
Medical Services Program may expand to serve other geographic areas,
for the purposes of providing public health care services in counties
where there is not a local initiative or county-organized health
plan that contracts with the State Department of Health Care
Services, or the County Medical Services Program, participating in
these joint ventures.
(3) Report these initial findings to the committees of
jurisdiction in the Senate and Assembly on or before January 15,
2009.
(4) Provide technical assistance to local health care delivery
entities, including local initiatives, county-organized health
systems, and the County Medical Services Program, to support joint
ventures and efforts by these entities to expand to serve other
geographic areas and specified populations, or to contract with
providers to provide health care services in counties where there is
not a local initiative or county-organized health plan that contracts
with the State Department of Health Care Services that opts to
participate in such joint ventures, or participation from the County
Medical Services Program.
(5) Consistent with the report and recommendations provided
pursuant to this section and consistent with existing law, the
department is authorized to enter into contracts with joint ventures
authorized pursuant to this section to provide medical services to
specified populations, as determined by the program.
(b) Health plans that contract with or are governed, owned,
or operated by, a county board of supervisors, a county special
commission, a county-organized health system, or county health
authority authorized by Section 14018.7, 14087.31, 14087.35,
14087.36, 14087.38, or 14087.96 or Article 2.8 (commencing with
Section 14087.5) of Chapter 7 of Division 9 of Part 3 of the Welfare
and Institutions Code, and the County Medical Services Program, are
authorized to form joint ventures to create integrated networks of
public health plans that pool risk and share networks.
(1) In forming joint ventures, participating health plans shall
seek to contract with designated public hospitals, county health
clinics, community health centers, and other traditional safety net
providers.
(2) All joint ventures and health care networks established
pursuant to this section shall seek licensure as a health care
service plan consistent with the Knox-Keene Health Care Service Plan
Act of 1975 (Chapter 2.2 (commencing with Section 1340) of Division 2
of the Health and Safety Code). Prior to commencement of enrollment,
the joint venture or health care network shall be licensed pursuant
to that act.
(c) There is hereby created the California Health Benefits Service
Program Stakeholder Committee. The committee shall be comprised of
10 members appointed by the Director of Health Care Services, the
Senate Committee on Rules, and the Speaker of the Assembly. The
director shall appoint six members including two representatives of
local initiatives authorized under the Welfare and Institutions Code,
a representative of county-organized health systems, a
representative of the County Medical Services Program, a
representative of health care providers, and a representative of
employers. The Senate Committee on Rules shall appoint two members
including a labor representative and a representative of health care
consumers. The Speaker of the Assembly shall appoint two members,
including a representative of local initiatives authorized under the
Welfare and Institutions Code, and a representative of organized
labor. The committee shall meet at least quarterly to provide input
to the program and assist the program in carrying out its
responsibilities as outlined in this section.
(d) On or before November 1, 2009, and annually thereafter, the
department, with input from the committee, shall update the
committees of jurisdiction in the Senate and Assembly on
implementation of this section and make recommendations, as
applicable, on changes necessary to implement this section. The
update shall also include progress on fulfilling the intent of the
Health Care Security and Cost Reduction Act and recommendations on
resources, policy, and legislative changes necessary to build and
implement a system of public health coverage throughout California.
The update shall describe the projects proposed or established
pursuant to this section, including, but not limited to, the
participating providers, the groups covered, the physicians and
hospitals in the network, and the counties served.
(e) The program shall consult with relevant departments, including
the Department of Managed Health Care, in the implementation of this
section.
(f) Nothing in this section shall be construed to prohibit any
other licensed health care service plan not mentioned in subdivisions
(b) and (c) from entering in joint ventures or contracts with the
State Department of Health Care Services to provide services in
counties in which there is not a Medi-Cal managed care health plan
that contracts with the department.
SEC. 18. Section 1262.9 is added to the Health and Safety Code, to
read:
1262.9. (a) If a patient has coverage for emergency health care
services and poststabilizing care, a noncontracting hospital shall
not bill the patient for emergency health care services and
poststabilizing care, except for applicable copayments and cost
shares.
(b) The noncontracting hospital and the health care service plan
or health insurer shall each retain their right to pursue all
currently available legal remedies they may have against each other,
including the right to determine the final payment due.
(c) For the purposes of this section:
(1) "Noncontracting hospital" means a general acute care hospital
as defined in subdivision (a) of Section 1250 that has a special
permit to operate an emergency medical service and does not have a
contract with a health care service plan or a health insurer for the
provision of emergency health care services and poststabilizing care
to the patient, who is one of that health care service plan's or
health insurer's enrollees, members, or insureds.
(2) "Emergency health care services and poststabilizing care"
means emergency services and out-of-area urgent services provided in
an emergency department and a hospital through discharge in
compliance with Sections 1262.8 and 1317 and, in the case of health
care service plans, the services required to be covered pursuant to
paragraph (6) of subdivision (b) of Section 1345, subdivision (i) of
Section 1367, Sections 1371.4, and 1371.5, of this code, and Sections
1300.67(g) and 1300.71.4 of Title 28 of the California Code of
Regulations.
SEC. 19. Section 1342.9 is added to the Health and Safety Code, to
read:
1342.9. (a) Notwithstanding any other provision of this chapter,
a health care service plan that provides services to a beneficiary of
the Medi-Cal program pursuant to Article 2.7 (commencing with
Section 14087.3), Article 2.8 (commencing with Section 14087.5), or
Article 2.91 (commencing with Section 14089) of Chapter 7 of, or
Article 1 (commencing with Section 14200) or Article 7 (commencing
with Section 14490) of Chapter 8 of, Part 3 of Division 9 of the
Welfare and Institutions Code shall, regarding coverage for
participants in a Medi-Cal managed care program, be subject solely to
the filing, reporting, monitoring, and survey requirements
established by the State Department of Health Care Services for the
Medi-Cal managed care program as those requirements pertain to the
following subjects: advertising and marketing; member materials,
including member handbooks, evidences of coverage, and disclosure
forms; and product design, including its scope and limitations. A
health care service plan that satisfies any of the foregoing filing,
reporting, monitoring, or survey requirements shall be deemed in
compliance with corresponding provisions, if any, of this chapter.
(b) The department and the State Department of Health Care
Services shall develop a joint filing and review process for medical
quality surveys required pursuant to Section 1380 and pursuant to
Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of
the Welfare and Institutions Code.
SEC. 20. Section 1347 is added to the Health and Safety Code, to
read:
1347. The director is authorized to provide regulatory and
program flexibilities to facilitate new, modified, or combined
licenses of local initiatives and county-organized health systems,
created pursuant to Section 155 or the California Health Benefits
Service Program (Chapter 1.6 (commencing with Section 155) of Part 1
of Division 1), that seek licensure for regional or statewide
networks for the purposes of contracting with the Managed Risk
Medical Insurance Board as a participating plan in the California
Cooperative Health Insurance Purchasing Program, or for the purposes
of providing coverage in the individual and group coverage markets.
In providing those flexibilities, the director shall ensure that the
health plans established pursuant to this section meet essential
financial, capacity, and consumer protection requirements of this
chapter.
SEC. 20.5. Section 1356.2 is added to the Health and Safety Code,
to read:
1356.2. (a) It is the intent of the Legislature to establish
mechanisms by which the state may defray the costs of an enrollee's
public program participation. The state's efforts may include, but
shall not be limited to, creating mechanisms to take advantage of
other opportunities for coverage available to that enrollee, to
access nonstate resources available to fund care for that enrollee,
or other mechanisms to minimize state costs.
(b) (1) The State Department of Health Care Services, in
consultation with the Department of Insurance and the Department of
Managed Health Care, shall evaluate and consider the options to
effectuate the intent of this section and determine the process and
procedures to implement subdivision (a). The departments shall assess
the fiscal ramifications and administrative feasibility of potential
options, and determine the requirements that best effectuate and
implement this section. The department shall report its findings to
the Joint Legislative Budget Committee by July 1, 2009.
(2) Ninety days following the department's notification to the
Joint Legislative Budget Committee pursuant to paragraph (1), the
departments shall implement the policies, procedures, and
requirements described in its report.
(c) To the extent necessary to achieve the purposes of subdivision
(a), the State Department of Health Care Services may implement
Section 1396e of Title 42 of the United States Code. To the extent
necessary to achieve the purposes of this section, this option shall
be exercised in conjunction with the benchmark authority provided in
Section 1396u-7 of Title 42 of the United States Code.
(d) To the extent necessary to achieve the purposes of subdivision
(a), the Department of Insurance and the Department of Managed
Health Care shall establish appropriate licensing requirements for
health insurers and health care service plans to permit the state to
access funds and contributions available to enrollees to reduce the
cost of subsidized coverage.
(e) For the purposes of implementing this section, the State
Department of Health Care Services, the Department of Insurance, and
the Department of Managed Health Care shall promulgate regulations in
accordance with the requirements of Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code.
(f) For the purposes of this section, "subsidized coverage" means
coverage provided under either of the following:
(1) Part 6.45 (commencing with Section 12699.201) of Division 2 of
the Insurance Code through a Cal-CHIPP Healthy Families plan.
(2) Section 14005.333 of the Welfare and Institutions Code.
(g) This section shall be implemented no later than one year from
the date that the act enacting this section becomes operative.
SEC. 21. Section 1357.54 of the Health and Safety Code is amended
to read:
1357.54. All individual health benefit plans, except for
short-term limited duration insurance, shall be renewable with
respect to all eligible individuals or dependents at the option of
the individual except as follows:
(a) For nonpayment of the required premiums or contributions by
the individual in accordance with the terms of the health insurance
coverage or the timeliness of the payments.
(b) For fraud or intentional misrepresentation of material fact
under the terms of the coverage by the individual.
(c) Movement of the individual contractholder outside the service
area, but only if the coverage is terminated uniformly without regard
to any health status-related factor of covered individuals.
(d) If the plan ceases to provide or arrange for the provision of
health care services for new individual health benefit plans in this
state; provided, however, that the following conditions are
satisfied:
(1) Notice of the decision to cease new or existing individual
health benefit plans in the state is provided to the director and to
the individual at least 180 days prior to discontinuation of that
coverage.
(2) Individual health benefit plans shall not be canceled for 180
days after the date of the notice required under paragraph (1) and
for that business of a plan that remains in force, any plan that
ceases to offer for sale new individual health benefit plans shall
continue to be governed by this section with respect to business
conducted under this section.
(3) A plan that ceases to write new individual health benefit
plans in this state after the effective date of this section shall be
prohibited from offering for sale individual health benefit plans in
this state for a period of five years from the date of notice to the
director.
(e) If the plan withdraws an individual health benefit plan from
the market; provided, that the plan notifies all affected individuals
and the director at least 90 days prior to the discontinuation of
these plans, and that the plan makes available to the individual all
health benefit plans that it makes available to new individual
business without regard to any health status-related factor of
enrolled individuals or individuals who may become eligible for the
coverage.
This section shall become inoperative on the date that Section
1399.829 becomes operative.
SEC. 22. Section 1365 of the Health and Safety Code is amended to
read:
1365. (a) An enrollment or a subscription may not be canceled or
not renewed except for the following:
(1) Failure to pay the charge for such coverage if the subscriber
has been duly notified and billed for the charge and at least 15 days
has elapsed since the date of notification.
(2) Fraud or deception in the use of the services or facilities of
the plan or knowingly permitting such fraud or deception by another.
(3) Such other good cause as is agreed upon in the contract
between the plan and a group or the subscriber.
(b) An enrollee or subscriber who alleges that an enrollment or
subscription has been canceled or not renewed because of the enrollee'
s or subscriber's health status or requirements for health care
services may request a review by the director. If the director
determines that a proper complaint exists under the provisions of
this section, the director shall notify the plan. Within 15 days
after receipt of such notice, the plan shall either request a hearing
or reinstate the enrollee or subscriber. If, after hearing, the
director determines that the cancellation or failure to renew is
contrary to subdivision (a), the director shall order the plan to
reinstate the enrollee or subscriber. A reinstatement pursuant to
this subdivision shall be retroactive to the time of cancellation or
failure to renew and the plan shall be liable for the expenses
incurred by the subscriber or enrollee for covered health care
services from the date of cancellation or nonrenewal to and including
the date of reinstatement.
(c) This section shall not abrogate any preexisting contracts
entered into prior to the effective date of this chapter between a
subscriber or enrollee and a health care service plan or a
specialized health care service plan including, but not limited to,
the financial liability of that plan, except that each plan shall, if
directed to do so by the director, exercise its authority, if any,
under any such preexisting contracts to conform them to the
provisions of subdivision (a).
(d) On and after the date that Section 1399.829 becomes operative,
this section shall not apply to individual health plan contracts.
SEC. 22.7. Section 1367.16 is added to the Health and Safety Code,
to read:
1367.16. For purposes of subdivision (c) of Section 1367.15,
"comparable benefits" means any health plan contract in the same
coverage choice category, as determined by the department and the
Department of Insurance pursuant to Section 1399.832, that a closed
block of business would have been in, had that block of business not
been closed. If the coverage benefits provided in the closed block of
business do not meet or exceed the minimum health care coverage
requirements of Section 1399.824, they shall be deemed comparable to
the lowest coverage choice category.
SEC. 23. Section 1367.205 is added to the Health and Safety Code,
to read:
1367.205. Commencing on or before January 1, 2010, a health care
service plan that provides prescription drug benefits and maintains
one or more drug formularies shall make the most current formularies
available electronically to prescribers and pharmacies.
SEC. 24. Section 1367.38 is added to the Health and Safety Code,
to read:
1367.38. (a) On and after January 1, 2009, every health care
service plan, except for a Medicare supplement plan, that covers
hospital, medical, or surgical expenses on a group basis shall offer
to include a Healthy Action Incentives and Rewards Program, as
described in subdivision (b), to be implemented in connection with a
health care service plan, under such terms and conditions as may be
agreed upon between the subscriber group and the health care service
plan. Every plan shall communicate the availability of that program
to all prospective subscriber groups with whom it is negotiating and
to existing subscriber groups upon renewal.
(b) For purposes of this section, benefits under a Healthy Action
Incentives and Rewards Program shall provide for all of the
following, where appropriate:
(1) Health risk appraisals to be used to assess an individual's
overall health status and to identify risk factors, including, but
not limited to, smoking and smokeless tobacco use, alcohol abuse,
drug use, and nutrition and physical activity practices.
(2) Enrollee access to an appropriate health care provider, as
medically necessary, to review and address the results of the health
risk appraisal. In addition, where appropriate, the Healthy Action
Incentives and Rewards Program may include followup through a
Web-based tool or a nurse hotline either in combination with a
referral to a provider or separately.
(3) Incentives or rewards for enrollees to become more engaged in
their health care and to make appropriate choices that support good
health, including obtaining health risk appraisals, screening
services, immunizations, or participating in healthy lifestyle
programs and practices. These programs and practices may include, but
need not be limited to, smoking cessation, physical activity, or
nutrition. Incentives may include, but need not be limited to, health
premium reductions, differential copayment or coinsurance amounts,
and cash payments. Rewards may include, but need not be limited to,
nonprescription pharmacy products or services not otherwise covered
under an enrollee's health plan contract, exercise classes, gym
memberships, and weight management programs. If a health care service
plan elects to offer an incentive in the form of a reduction in the
premium amount, the premium reduction shall be standardized and
uniform for all groups and subscribers and shall be offered only
after the successful completion of the specified program or practice
by the enrollee or subscriber.
(c) (1) A health care service plan subject to this section shall
offer and price all Healthy Action Incentives and Rewards Programs
approved by the director consistently across all groups, potential
groups, and individuals and offer and price the programs without
regard to the health status, prior claims experience, or risk profile
of the members of a group. A health plan shall not condition the
offer, delivery, or renewal of a contract that covers hospital,
medical, or surgical expenses on the group's purchase, acceptance, or
enrollment in a Healthy Action Incentives and Rewards Program.
Rewards and incentives established in the program may not be
designed, provided, or withheld based on the actual health service
utilization or health care claims experience of the group, members of
the group, or the individual.
(2) In order to demonstrate compliance with this section, a health
care service plan shall file the program description and design as
an amendment to its application for licensure pursuant to subdivision
(a) of Section 1352. The director shall disapprove, suspend, or
withdraw any product or program developed pursuant to this section if
the director determines that the product or product design has the
effect of allowing health care service plans to market, sell, or
price health coverage for healthier lower risk profile groups in a
preferential manner that is inconsistent with the requirement to
offer, market, and sell products pursuant to Article 3.1 (commencing
with Section 1357) and Article 11.6 (commencing with Section
1399.820).
(d) This section shall supplement, and not supplant, any other
section in this chapter concerning requirements for plans to provide
health care services, childhood immunizations, adult immunizations,
and preventive care services.
(e) This section shall only be implemented if and to the extent
allowed under federal law. If any portion of this section is held to
be invalid, as determined by a final judgment of a court of competent
jurisdiction, this section shall become inoperative.
SEC. 25. Section 1368.025 is added to the Health and Safety Code,
to read:
1368.025. In addition to the duties listed in paragraph (3) of
subdivision (c) of Section 1368.02, the duties of the Office of
Patient Advocate shall include providing access to the public to
reports and data obtained by the Office of Statewide Health Planning
and Development in a format and through mechanisms, including, but
not limited to, the Internet, that allow the public to use the
information to assist them in making informed selections of health
plans, hospitals, medical groups, nursing homes, and other providers
about whom the office has collected information.
SEC. 26. Section 1378.1 is added to the Health and Safety Code, to
read:
1378.1. (a) Except as provided in subdivision (f), a full-service
health care service plan shall, on and after July 1, 2010, expend in
the form of health care benefits no less than 85 percent of the
aggregate dues, fees, premiums, or other periodic payments received
by the plan. For purposes of this section, the plan may deduct from
the aggregate dues, fees, premiums, or other periodic payments
received by the plan the amount of income taxes or other taxes that
the plan expensed. For purposes of this section, "health care
benefits" shall mean health care services that are either provided by
or reimbursed by the plan or its contracted providers as plan
benefits.
(b) (1) In addition to the health care benefits defined in
subdivision (a), health care benefits shall include:
(A) The costs of programs or activities, including training and
the provision of informational materials that are determined as part
of the regulations under subdivision (d) to improve the provision of
quality care, improve health care outcomes, or encourage the use of
evidence-based medicine.
(B) Disease management expenses using cost-effective
evidence-based guidelines.
(C) Plan medical advice by telephone.
(D) Payments to providers as risk pool payments of
pay-for-performance initiatives.
(2) Health care benefits shall not include administrative costs
listed in Section 1300.78 of Title 28 of the California Code of
Regulations in effect on January 1, 2007.
(c) To assess compliance with this section, a plan licensed to
operate in California may average its total costs across all health
care service plan contracts issued, amended, or renewed in
California, and all health insurance policies issued, amended, or
renewed by its affiliated disability insurers with valid California
certificates of authority, except for those policies listed in
subdivision (f) of Section 10113.10 of the Insurance Code.
(d) The department and the Department of Insurance shall jointly
adopt and amend regulations to implement this section and Section
10113.10 of the Insurance Code to establish uniform reporting by
plans and insurers of the information necessary to determine
compliance with this section. These regulations may include
additional elements in the definition of health care benefits not
identified in paragraph (1) of subdivision (b) in order to
consistently operationalize the requirements of this section among
health plans and health insurers, but such regulatory additions shall
be consistent with the legislative intent that health plans expend
at least 85 percent of aggregate payments as provided in subdivision
(a) on health care benefits.
(e) The department may exclude from the determination of
compliance with the requirement of subdivision (a) any new health
care service plan contracts for up to the first two years that these
contracts are offered for sale in California, provided that the
director determines that the new contracts are substantially
different from the existing contracts being issued, amended, or
renewed by the health plan seeking the exclusion.
(f) This section shall not apply to Medicare supplement plans or
to coverage offered by specialized health care service plans,
including, but not limited to, ambulance, dental, vision, behavioral
health, chiropractic, and naturopathic.
SEC. 27. Section 1395.2 is added to the Health and Safety Code, to
read:
1395.2. (a) A health care service plan may provide notice by
electronic transmission and shall be deemed to have fully complied
with the specific statutory or regulatory requirements to provide
notice by United States mail to an applicant, enrollee, or
subscriber, if it complies with all of the following requirements:
(1) Obtains authorization from the applicant, enrollee, or
subscriber to provide notices by electronic transmission and to cease
providing notices by United States mail. "Authorization" means the
agreement by the applicant, enrollee, or subscriber through
interactive voice response, the Internet or other similar medium, or
in writing, to receive notices by electronic transmission.
(2) Uses an authorization process, approved by the department, in
which the applicant, enrollee, or subscriber confirms understanding
of and agreement with the specific notices or materials that will be
provided by electronic transmission.
(3) Complies with the specific statutory or regulatory
requirements as to the content of the notices it sends by electronic
transmission.
(4) Provides for the privacy of the notice as required by state
and federal laws and regulations.
(5) Allows the applicant, enrollee, or subscriber at any time to
terminate the authorization to provide notices by electronic
transmission and receive the notices through the United States mail,
if specific statutory or regulatory requirements require notice by
mail.
(6) Sends the electronic transmission of a notice to the last
known electronic address of the applicant, enrollee, or subscriber.
If the electronic transmission fails to reach its intended recipient
twice, the health care service plan shall resume sending all notices
to the last known
United States mail address of the applicant, enrollee, or subscriber.
(7) Maintains an Internet Web site where the applicant, enrollee,
or subscriber may access the notices sent by electronic transmission.
(8) Informs the applicant, enrollee, or subscriber how to
terminate the authorization to provide notices sent by electronic
transmission.
(b) A health care service plan shall not use the electronic mail
address of an applicant, enrollee, or subscriber that it obtained for
the purposes of providing notice pursuant to subdivision (a) for any
purpose other than communicating with the enrollee, applicant, or
subscriber about his or her policy, plan, or benefits.
(c) No person other than the applicant, enrollee, or subscriber to
whom the medical information in the notice pertains or a
representative lawfully authorized to act on behalf of the applicant,
enrollee, or subscriber, may authorize the transmission of medical
information by electronic transmission. "Medical information" for
these purposes shall have the meaning set forth in subdivision (g) of
Section 56.05 of the Civil Code. The transmission of any medical
information, as that term is used in subdivision (g) of Section 56.05
of the Civil Code, shall comply with the Confidentiality of Medical
Information Act (Part 2.6 (commencing with Section 56) of Division 1
of the Civil Code).
(d) A notice transmitted electronically pursuant to this section
is a private and confidential communication, and it shall constitute
a violation of this chapter for a person, other than the applicant,
enrollee, or subscriber to whom the notice is addressed, to read or
otherwise gain access to the notice without the express, specific
permission of the notice's addressee. This subdivision shall not
apply to a health care provider, health care service plan, or
contractor of a health care provider or health care service plan, of
an applicant, enrollee, or subscriber if the health care provider,
health care service plan, or contractor of a health care provider or
health care service plan is authorized to have access to the medical
information pursuant to the Confidentiality of Medical Information
Act (Part 2.6 (commencing with Section 56) of Division 1 of the Civil
Code).
(e) A health care service plan shall not impose additional fees or
a differential if an applicant, enrollee, or subscriber elects not
to receive notices by electronic transmission.
(f) Notices that may be made by electronic transmission include an
explanation of benefits; responses to inquiries from an applicant,
enrollee, or subscriber; underwriting decisions; distribution of plan
contracts, including evidence of coverage and disclosure forms
pursuant to Sections 1300.63.1 and 1300.63.2 of Title 28 of the
California Code of Regulations; a list of contracting providers
pursuant to Section 1367.26; and changes in rates or coverage
pursuant to Sections 1374.21, 1374.22, and 1374.23. A plan may not
transmit through electronic means any notice that may affect the
eligibility for, or continued enrollment in, coverage.
SEC. 27.3. Section 1399.56 of the Health and Safety Code is
amended to read:
1399.56. (a) Compensation of a person retained by a health care
service plan to review claims for health care services shall not be
based on either of the following:
(1) A percentage of the amount by which a claim is reduced for
payment.
(2) The number of claims or the cost of services for which the
person has denied authorization or payment.
(b) This section shall become inoperative on December 1, 2008,
and, as of January 1, 2009, is repealed, unless a later enacted
statute, that becomes operative on or before January 1, 2009, deletes
or extends the dates on which it becomes inoperative and is
repealed.
SEC. 27.5. Section 1399.56 is added to the Health and Safety Code,
to read:
1399.56. (a) Compensation of a person employed by or contracted
with a health care service plan to review claims or eligibility for
health care services shall not be based on either of the following:
(1) A percentage of the amount by which a claim is reduced for
payment.
(2) The number of claims or the cost of services for which the
person has denied authorization or payment.
(b) This section shall become operative on December 1, 2008.
SEC. 28. Section 1399.58 is added to the Health and Safety Code,
to read:
1399.58. (a) No health care service plan shall set performance
goals or quotas or provide additional compensation to any person
employed by or contracted with the health care service plan based on
the number of persons for which coverage is rescinded or the
financial savings to the health care service plan associated with the
rescission of coverage.
(b) This section shall become operative on December 1, 2008.
SEC. 28.5. Article 11.6 (commencing with Section 1399.820) is
added to Chapter 2.2 of Division 2 of the Health and Safety Code, to
read:
Article 11.6. Individual Market Reform and Guarantee Issue
1399.820. It is the intent of the Legislature to do both of the
following:
(a) Guarantee the availability and renewability of health coverage
to individuals through the private health insurance market.
(b) Require that health care service plans and health insurers
issuing coverage in the individual market compete on the basis of
price, quality, and service, and not on risk selection.
1399.821. For purposes of this article, the following terms shall
have the following meanings:
(a) "Anniversary date" means the calendar date one year from, and
each subsequent year thereafter, the date an individual enrolls in a
health plan contract.
(b) "Coverage choice category" means the category of health plan
contracts and health insurance policies established by the department
and the Department of Insurance pursuant to Section 1399.832.
(c) "Dependent" means the spouse, registered domestic partner, or
child of an individual, subject to applicable terms of the health
plan contract covering the individual.
(d) "Health insurance policy" means an individual disability
insurance policy offered, sold, amended, or renewed to individuals
and their dependents and that provides coverage for hospital,
medical, or surgical benefits. The term shall not include any of the
following kinds of insurance:
(1) Accidental death and accidental death and dismemberment.
(2) Disability insurance, including hospital indemnity,
accident-only, and specified disease insurance that pays benefits on
a fixed benefit, cash-payment-only basis.
(3) Credit disability, as defined in Section 779.2 of the
Insurance Code.
(4) Coverage issued as a supplement to liability insurance.
(5) Disability income, as defined in subdivision (i) of Section
799.01 of the Insurance Code.
(6) Insurance under which benefits are payable with or without
regard to fault and that is statutorily required to be contained in
any liability insurance policy or equivalent self-insurance.
(7) Insurance arising out of a workers' compensation or similar
law.
(8) Long-term care coverage.
(9) Dental coverage.
(10) Vision coverage.
(11) Medicare supplement, CHAMPUS-supplement or
Tricare-supplement, behavioral health-only, pharmacy-only, hospital
indemnity, hospital-only, accident-only, or specified disease
insurance that does not pay benefits on a fixed benefit,
cash-payment-only basis.
(e) "Health insurer" means a disability insurer that offers and
sells health insurance.
(f) "Health plan" means a health care service plan, as defined in
subdivision (f) of Section 1345, that is lawfully engaged in
providing, arranging, paying for, or reimbursing the cost of health
care services and is offering or selling health care service plan
contracts in the individual market. A health plan shall not include a
specialized health care service plan.
(g) "Health plan contract" means an individual health care service
plan contract offered, sold, amended, or renewed to individuals and
their dependents. The term shall not include long-term care
insurance, dental, or vision coverage. In addition, the term shall
not include a specialized health care service plan contract, as
defined in subdivision (o) of Section 1345.
(h) "Purchasing pool" means the program established under Part
6.45 (commencing with Section 12699.201) of Division 2 of the
Insurance Code.
(i) "Rating period" means the period for which premium rates
established by a plan are in effect and shall be no less than 12
months beginning on the effective date of the subscriber's health
plan contract.
(j) "Risk adjustment factor" means the percentage adjustment to be
applied to the standard risk rate for a particular individual, based
upon any expected deviations from standard claims due to the health
status of the individual.
(k) "Risk category" means the following characteristics of an
individual: age, geographic region, and family composition of the
individual, plus the health plan contract selected by the individual.
(1) No more than the following age categories may be used in
determining premium rates:
Under 1.
1-18.
19-24.
25-29.
30-34.
35-39.
40-44.
45-49.
50-54.
55-59.
60-64.
65 and over.
However, for the 65 and over age category, separate premium rates
may be specified depending upon whether coverage under the health
plan contract will be primary or secondary to benefits provided by
the federal Medicare Program pursuant to Title XVIII of the federal
Social Security Act.
(2) Health plans shall determine rates using no more than the
following family size categories:
(A) Single.
(B) More than one child 18 years of age or under and no adults.
(C) Married couple or registered domestic partners.
(D) One adult and child.
(E) One adult and children.
(F) Married couple and child or children, or registered domestic
partners and child or children.
(3) (A) In determining rates for individuals, a health plan that
operates statewide shall use no more than nine geographic regions in
the state, have no region smaller than an area in which the first
three digits of all its ZIP Codes are in common within a county, and
divide no county into more than two regions. Health plans shall be
deemed to be operating statewide if their coverage area includes 90
percent or more of the state's population. Geographic regions
established pursuant to this section shall, as a group, cover the
entire state, and the area encompassed in a geographic region shall
be separate and distinct from areas encompassed in other geographic
regions. Geographic regions may be noncontiguous.
(B) (i) In determining rates for individuals, a plan that does not
operate statewide shall use no more than the number of geographic
regions in the state that is determined by the following formula: the
population, as determined in the last federal census, of all
counties that are included in their entirety in a plan's service area
divided by the total population of the state, as determined in the
last federal census, multiplied by nine. The resulting number shall
be rounded to the nearest whole integer. No region may be smaller
than an area in which the first three digits of all its ZIP Codes are
in common within a county and no county may be divided into more
than two regions. The area encompassed in a geographic region shall
be separate and distinct from areas encompassed in other geographic
regions. Geographic regions may be noncontiguous. No health plan
shall have less than one geographic area.
(ii) If the formula in clause (i) results in a health plan that
operates in more than one county having only one geographic region,
then the formula in clause (i) shall not apply and the health plan
may have two geographic regions, provided that no county is divided
into more than one region.
Nothing in this section shall be construed to require a health
plan to establish a new service area or to offer health coverage on a
statewide basis, outside of the health plan's existing service area.
(4) A health plan may rate its entire portfolio of health plan
contracts in accordance with expected costs or other market
considerations, but the rate for each health plan contract shall be
set in relation to the balance of the portfolio, as certified by an
actuary.
(5) Each health plan contract shall be priced as determined by
each health plan to reflect the difference in benefit variation, or
the effectiveness of a provider network, and each health plan may
adjust the rate for a specific plan contract for risk selection only
to the extent permitted by subdivision (d) of Section 1399.840.
(l) "Standard risk rate" means the rate applicable to an
individual in a particular risk category.
(m) "Subscriber" means the individual who is enrolled in a health
plan contract, is the basis for eligibility for enrollment in the
contract, and is responsible for payment to the health plan.
1399.823. On and after March 31, 2009, a health plan shall not
offer to an individual a health plan contract that provides less than
minimum creditable coverage as defined by the Managed Risk Medical
Insurance Board pursuant to Section 12739.50 of the Insurance Code.
1399.826. (a) Notwithstanding Chapter 15 (commencing with Section
8899.50) of Division 1 of Title 2 of the Government Code and Section
1399.823, a health plan may renew an individual health care benefit
plan for anyone enrolled on March 1, 2009, indefinitely without
increasing benefits to meet the required minimum creditable coverage
established by the Managed Risk Medical Insurance Board pursuant to
Section 12739.50 of the Insurance Code. Those individual health care
benefit plans, however, may not be offered to new enrollment, unless
they are amended to meet the minimum creditable coverage established
by the Managed Risk Medical Insurance Board pursuant to Section
12739.50 of the Insurance Code. In offering those plans for renewal,
rates determined by health plans shall meet the requirements of
Sections 1399.821 and 1399.840. An individual who maintains coverage
in a health plan contract pursuant to this section shall be deemed to
be in compliance with Section 8899.50 of the Government Code.
(b) A health plan shall not cease to renew coverage in an
individual health plan contract described in subdivision (a) except
as permitted pursuant to Section 1367.15.
(c) On and after March 1, 2009, the director shall not approve for
offer and sale in this state any new individual health plan contract
that does not meet or exceed the requirements for minimum creditable
coverage established by the Managed Risk Medical Insurance Board
pursuant to Section 12739.50 of the Insurance Code.
(d) Effective July 1, 2010, all individual health plan contracts
approved, offered, and sold prior to March 1, 2009, which do not
comply with minimum creditable coverage standards adopted by the
Managed Risk Medical Insurance Board pursuant to Section 12739.50 of
the Insurance Code, exclusively because the contract includes a
lifetime benefit maximum inconsistent with minimum creditable
coverage requirements, shall be modified to comply with the minimum
creditable coverage standard.
(e) This section shall become operative on January 1, 2009.
1399.827. A health plan shall, in addition to complying with this
chapter and the rules of the director, comply with this article.
1399.828. This article shall not apply to health plan contracts
for coverage of Medicare services pursuant to contracts with the
United States government, Medicare supplement, Medi-Cal contracts
with the State Department of Health Care Services, Healthy Families
Program contracts with the Managed Risk Medical Insurance Board,
long-term care coverage, specialized health care service plan
contracts, as defined in subdivision (o) of Section 1345, or the
purchasing pool established under Part 6.45 (commencing with Section
12699.201) of Division 2 of the Insurance Code.
1399.829. (a) Except for the health plan contracts described in
subdivision (a) of Section 1399.826, a health plan shall fairly and
affirmatively offer, market, and sell all of the plan's contracts
that are sold to individuals to all individuals in each service area
in which the health plan provides or arranges for the provision of
health care services.
(b) A health plan may not reject an application from an
individual, or his or her dependents, for a health plan contract, or
refuse to renew an individual health plan contract, if all of the
following requirements are met:
(1) The individual agrees to make the required premium payments.
(2) The individual and his or her dependents who are to be covered
by the health plan contract work or reside in the service area in
which the health plan provides or otherwise arranges for the
provision of health care services.
(3) The individual provides the information requested on the
application to determine the appropriate rate.
(c) Notwithstanding subdivision (b), if an individual, or his or
her dependents, applies for a health plan contract in a coverage
choice category for which he or she is not eligible pursuant to
Section 1399.837, the health plan may reject that application
provided that the plan also offers the individual and his or her
dependents coverage in the appropriate coverage choice category.
(d) Notwithstanding subdivision (b), a health plan is not required
to renew an individual health plan contract if any of the conditions
listed in subdivision (a) of Section 1399.839 are met.
(e) Notwithstanding any other provision of this chapter or of a
health plan contract, every health plan shall comply with the
requirements of Chapter 7 (commencing with Section 3750) of Part 1 of
Division 9 of the Family Code and Section 14124.94 of the Welfare
and Institutions Code.
(f) A health plan may require an individual to provide information
on his or her health status or health history, or that of his or her
dependents, in the application for enrollment to the extent required
to apply the risk adjustment factor permitted pursuant to
subdivision (d) of Section 1399.840. The health plan shall use the
standardized form and process developed by the department pursuant to
Section 1399.840. After the health plan contract's effective date of
coverage, a health plan may request that the subscriber provide
information voluntarily on his or her health history or health
status, or that of his or her dependents, for purposes of providing
care management services, including disease management services.
(g) Notwithstanding subdivision (b), a health plan may reject an
application for any person who has been a resident of California for
six months or less unless one of the following applies: (1) the
person is a federally eligible defined individual as defined in
Section 1399.801 or Section 10785 of the Insurance Code; or (2) the
individual can demonstrate a minimum of two years of prior creditable
coverage at least equivalent to the minimum creditable coverage
developed by the Managed Risk Medical Insurance Board pursuant to
Section 12739.50 of the Insurance Code and provided the person
applies for coverage in California within 62 days of termination or
cancellation of the prior creditable coverage.
(h) Notwithstanding subdivision (b), a health plan may reject an
application for coverage from either of the following:
(1) A person who is exempt from the requirements of Section
8899.50 of the Government Code because the person or family has an
income at or below 250 percent of the federal poverty level and the
person's or family's share of premium for minimum creditable coverage
exceeds 5 percent of his or her family income, except for those
individuals meeting the criteria in paragraph (1) or (2) of
subdivision (g).
(2) A person exempted from the requirements of Section 8899.50 of
the Government Code pursuant to any exemption authorized or granted
by the Managed Risk Medical Insurance Board pursuant to Section
12739.501 of the Insurance Code, for the time period of the
exemption, as determined by the board.
(i) Notwithstanding Section 1399.846, this section shall not
become operative until Section 12739.51 of the Insurance Code is
implemented.
1399.831. (a) A health plan shall not impose any preexisting
condition exclusions, waivered conditions, or postenrollment waiting
or affiliation periods on any health plan contract issued, amended,
or renewed pursuant to this article, except as provided under
subdivision (b) of this section.
(b) After the requirement to guarantee issue of coverage under
Section 1399.826 has been in effect for nine months, a health plan
may impose a preexisting condition exclusion of up to 12 months for
any person who fails to comply for more than 62 days with the
requirement to maintain coverage under Section 8899.50 of the
Government Code, providing, however, that the exclusion may not
exceed the length of time that the person failed to comply with the
requirements of that section. "Preexisting condition exclusion" means
a contract provision that excludes coverage for charges or expenses
incurred during a specified period following the individual's
effective date of coverage, as to a condition for which medical
advice, diagnosis, care, or treatment was recommended or received
during a specified period immediately preceding the effective date of
coverage. For purposes of this section, preexisting condition
provisions contained in plan contracts may relate only to conditions
for which medical advice, diagnosis, care, or treatment, including
use of prescription drugs, was recommended or received from a
licensed health practitioner during the 12 months immediately
preceding the effective date of coverage.
1399.832. (a) On or before April 1, 2009, the department and the
Department of Insurance shall jointly, by regulation, develop a
system to categorize all health plan contracts and health insurance
polices offered and sold to individuals pursuant to this article and
Chapter 9.6 (commencing with Section 10920) of Part 2 of Division 2
of the Insurance Code into five coverage choice categories. These
coverage choice categories shall do all of the following:
(1) Reflect a reasonable continuum between the coverage choice
category with the lowest level of health care benefits and the
coverage choice category with the highest level of health care
benefits.
(2) Permit reasonable benefit variation that will allow for a
diverse market within each coverage choice category.
(3) Be enforced consistently between health plans and health
insurers in the same marketplace regardless of licensure.
(4) Within each coverage choice category, include one standard
health maintenance organization (HMO) and one standard preferred
provider organization (PPO), each of which is the health plan
contract with the lowest benefit level in that category and for that
type of contract.
(b) All health plans shall submit filings required pursuant to
Section 1399.842 no later than October 1, 2009, for all individual
health plan contracts to be offered or sold on or after July 1, 2010,
to comply with this article, and thereafter any additional health
plan contracts shall be filed pursuant to Section 1399.842. The
director shall categorize each health plan contract offered by a
health plan into the appropriate coverage choice category on or
before March 31, 2010.
(c) To facilitate consumer comparison shopping, all health plans
that offer coverage on an individual basis shall offer at least one
health plan contract in each coverage choice category, including
offering at least one of the standard contracts developed pursuant to
paragraph (4) of subdivision (a), but a health plan may offer
multiple products in each category.
(d) If a health plan offers a specific type of health plan
contract in one coverage choice category, it must offer that specific
type of health plan contract in each coverage choice category. A
"type of health plan contract" includes a preferred provider
organization, an exclusive provider organization model plan, a point
of service model plan, and a health maintenance organization model
plan.
(e) Health plans shall have flexibility in establishing provider
networks, provided that access to care standards pursuant to this
chapter are met, and provided that the provider network offered for
one health plan contract in one coverage choice category is offered
for at least one health plan contract in each coverage choice
category.
(f) A health plan shall establish prices for its products that
reflect a reasonable continuum between the products offered in the
coverage choice category with the lowest level of benefits and the
products offered in the coverage choice category with the highest
level of benefits. A health plan shall not establish a standard risk
rate for a product in a coverage choice category at a lower rate than
a product offered in a lower coverage choice category.
(g) The coverage choice category with the lowest level of benefits
shall include the benefits which meet the requirement of minimum
creditable coverage as determined by the Managed Risk Medical
Insurance Board pursuant to Section 12739.50 of the Insurance Code.
1399.833. A health plan shall offer coverage for a Healthy Action
Incentives and Rewards Program that complies with the requirements
of Section 1367.38 in at least one health plan contract in every
coverage choice category.
1399.834. The Office of the Patient Advocate shall develop and
maintain on its Internet Web site a uniform benefits matrix of all
available individual health plan contracts and individual health
insurance policies arranged by coverage choice category. This uniform
benefit matrix shall include all of the following:
(a) Benefit information submitted by health plans pursuant to
Section 1399.843 and by health insurers pursuant to Section 10940 of
the Insurance Code, including, but not limited to, the following
category descriptions:
(1) Deductibles.
(2) Copayments or coinsurance, as applicable.
(3) Annual out-of-pocket maximums.
(4) Professional services.
(5) Outpatient services.
(6) Preventive services.
(7) Hospitalization services.
(8) Emergency health services.
(9) Ambulance services.
(10) Prescription drug coverage.
(11) Durable medical equipment.
(12) Mental health and substance abuse services.
(13) Home health services.
(14) Other.
(b) The telephone number or numbers that may be used by an
applicant to contact either the department or the Department of
Insurance, as appropriate, for additional assistance.
1399.835.
When an individual submits a premium payment, based on the quoted
premium charges, and that payment is delivered or postmarked,
whichever occurs earlier, within the first 15 days of the month,
coverage under the health plan contract shall become effective no
later than the first day of the following month. When that payment is
either delivered or postmarked after the 15th day of a month,
coverage shall become effective no later than the first day of the
second month following delivery or postmark of the payment.
1399.836. Except as provided in Section 1399.829, a health plan
is not required to offer an individual health plan contract and may
reject an application for an individual health plan contract in the
case of any of the following:
(a) The individual and dependents who are to be covered by the
health plan contract do not work or reside in a health plan's
approved service area.
(b) (1) Within a specific service area or portion of a service
area, if a health plan reasonably anticipates and demonstrates to the
satisfaction of the director that it will not have sufficient health
care delivery resources to assure that health care services will be
available and accessible to the eligible individual and dependents of
the individual because of its obligations to existing enrollees.
(2) A health plan that cannot offer a health plan contract to
individuals because it is lacking in sufficient health care delivery
resources within a service area or a portion of a service area may
not offer a health plan contract in the area in which the health plan
is not offering coverage to individuals until the health plan
notifies the director that it has the ability to deliver services to
new enrollees, and certifies to the director that from the date of
the notice it will enroll all individuals and groups requesting
coverage in that area from the health plan.
(c) The plan is licensed in California and meets all of the
following criteria: (1) does not offer coverage to individuals in the
commercial market; (2) requires that its members qualify through the
Medicare Program or Medi-Cal program or their successors; and (3) 75
percent or more of the organization's total enrollment premiums are
paid by the Medi-Cal program or Medicare Program, or by a combination
of Medi-Cal and Medicare payments. In no event shall this exemption
be based upon enrollment in Medicare supplement contracts, as
described in Article 3.5 (commencing with Section 1358).
(d) Any person who has been a resident of California for six
months or less unless one of the following applies: (1) the person is
a federally eligible defined individual as defined in Section
1399.801 or Section 10785 of the Insurance Code, or (2) the person
can demonstrate a minimum of two years of prior creditable coverage
at least equivalent to the minimum creditable coverage developed by
the Managed Risk Medical Insurance Board pursuant to Section 12739.50
of the Insurance Code and providing the person applies for coverage
in California within 62 days of termination or cancellation of the
prior creditable coverage.
(e) Any person who has been granted a temporary or permanent
hardship exemption from the requirement to maintain minimum
creditable coverage by the Managed Risk Medical Insurance Board
pursuant to Section 12739.501 of the Insurance Code during the time
period of the exemption as determined by the board.
1399.837. (a) If an individual disenrolls from a health plan
contract or health insurance policy or if the individual's health
plan contract or health insurance policy is canceled pursuant to
Section 1399.839 or Section 10936 of the Insurance Code prior to the
anniversary date of the health plan contract or health insurance
policy, subsequent enrollment in an individual health plan contract
or an individual health insurance policy shall be limited to the same
coverage choice category the individual was enrolled in prior to
disenrollment or cancellation.
(b) (1) An individual may change to a health plan contract in a
different coverage choice category only on the anniversary date of
the subscriber or upon a qualifying event.
(2) In no case, however, may an individual move up more than one
coverage choice category on the anniversary date of the subscriber
unless there is also a qualifying event.
(c) An individual health plan contract described in subdivision
(a) of Section 1399.826 that does not meet or exceed the requirements
for minimum creditable coverage established by the Managed Risk
Medical Insurance Board shall be deemed to be the lowest coverage
choice category for purposes of this section.
(d) On and after January 1, 2011, an individual who fails to
comply with the provisions of Chapter 15 (commencing with Section
8899.50) of Division 1 of Title 2 of the Government Code for more
than 62 days may only enroll in a health plan contract or health
insurance policy in the lowest coverage choice category. Upon the
individual's anniversary date, the individual may move to a higher
coverage choice category pursuant to subdivision (b).
(e) For purposes of this section, a qualifying event occurs upon
any of the following:
(1) Upon the death of the subscriber, on whose qualifying coverage
an individual was a dependent.
(2) Upon marriage of the subscriber or entrance by the subscriber
into a domestic partnership pursuant to Section 298.5 of the Family
Code.
(3) Upon divorce or legal separation of an individual from the
subscriber.
(4) Upon loss of dependent status by a dependent enrolled in group
health care coverage through a health care service plan or a health
insurer.
(5) Upon the birth or adoption of a child.
(6) Upon the loss of minimum creditable coverage as defined by the
Managed Risk Medical Insurance Board pursuant to Section 12739.50 of
the Insurance Code.
1399.838. The director may require a health plan to discontinue
the offering of contracts or acceptance of applications from any
individual upon a determination by the director that the health plan
does not have sufficient financial viability, or organizational and
administrative capacity to ensure the delivery of health care
services to its enrollees.
1399.839. (a) All health plan contracts offered pursuant to this
article shall be renewable with respect to all individuals and
dependents at the option of the subscriber and shall not be canceled
except for the following reasons:
(1) Failure to pay any charges for coverage provided pursuant to
the contract if the subscriber has been duly notified and billed for
those charges and at least 15 days has elapsed since the date of
notification.
(2) Fraud or intentional misrepresentation of material fact under
the terms of the health plan contract by the individual.
(3) Fraud or deception in the use of the services or facilities of
the plan or knowingly permitting that fraud or deception by another.
(4) Movement of the subscriber outside the health plan's service
area.
(5) If the health plan ceases to provide or arrange for the
provision of health care services for new or existing individual
health plan contracts in this state, provided, however, that the
following conditions are satisfied:
(A) Notice of the decision to cease new or existing individual
health plan contracts in the state is provided to the director and to
the individual at least 180 days prior to discontinuation of that
coverage.
(B) Individual health plan contracts shall not be canceled for 180
days after the date of the notice required under subparagraph (A)
and for that business of a health plan that remains in force, any
health plan that ceases to offer for sale new individual health plan
contracts shall continue to be governed by this article with respect
to business conducted under this article.
(C) A health plan that ceases to write new individual health plan
contracts in this state after the effective date of this section
shall be prohibited from offering for sale individual health plan
contracts in this state for a period of five years from the date of
notice to the director. The director may permit a health plan to
offer and sell individual health plan contracts in this state before
the five-year time period has expired if the director determines that
it is in the best interest of the state and necessary to preserve
the integrity of the health care market.
(6) If the health plan withdraws an individual health plan
contract from the market, provided that the health plan notifies all
affected individuals and the director at least 90 days prior to the
discontinuation of these health plan contracts, and that the health
plan makes available to the individual all health plan contracts with
comparable benefits that it makes available to new individual
business.
(b) On or after July 1, 2010, a health plan shall not rescind the
health plan contract of any individual.
(c) Nothing in this article shall limit any other remedies
available at law to a health plan.
1399.840. Premiums for health plan contracts offered, renewed, or
delivered by health plans on or after the effective date of this
article shall be subject to the following requirements:
(a) The premium for new or existing business shall be the standard
risk rate for an individual in a particular risk category.
(b) The premium rates shall be in effect for no less than 12
months from the date of the health plan contract.
(c) When determining the premium rate for more than one covered
individual, the health plan shall determine the rate based on the
standard risk rate for the subscriber. If more than one individual is
a subscriber, the premium rate shall be based on the age of the
youngest spouse or registered domestic partner.
(d) (1) Notwithstanding subdivision (a), for the first two years
following the implementation of this section, a health plan may apply
a risk adjustment factor to the standard risk rate that may not be
more than 120 percent or less than 80 percent of the applicable
standard risk rate. In determining the risk adjustment factor, a
health plan shall use the standardized form and uniform process
developed by the director pursuant to subdivision (f).
(2) After the first two years following the implementation of this
section, the adjustments applicable under paragraph (1) shall not be
more than 110 percent or less than 90 percent of the standard risk
rate.
(3) Upon the renewal of any contract, the risk adjustment factor
applied to the individual's rate may not be more than 5 percentage
points different than the factor applied to that rate prior to
renewal. The same limitation shall be applied to individuals with
respect to the risk adjustment factor applicable for the purchase of
a new product where the individual's prior health plan has
discontinued that product.
(4) After the first four years following the implementation of
this section, a health plan shall base rates on the standard risk
rate with no risk adjustment factor.
(e) The director and the Insurance Commissioner shall jointly
establish a maximum limit on the ratio between the standard risk
rates for contracts for individuals in the 60 to 64 years of age,
inclusive, category and contracts for individuals in the 30 to 34
years of age, inclusive, category.
(f) On or before March 1, 2009, the director shall, in
consultation with the Insurance Commissioner and the Managed Risk
Medical Insurance Board and using a qualified independent actuary,
develop a standardized form and uniform evaluation process to be used
by all health care service plans and all disability insurers
exclusively for the purpose of determining any risk adjustment rating
factor to be applied to an individual's premium rate based on actual
or expected health care use. Health plans shall base the risk
adjustment factors as authorized in this section solely on the
results of the standardized form and uniform evaluation process
developed by the director.
1399.841. (a) In connection with the offering for sale of any
health plan contract to an individual, each health plan shall make a
reasonable disclosure, as part of its solicitation and sales
materials, of all of the following:
(1) The provisions concerning the health plan's right to change
premium rates on an annual basis and the factors other than provision
of services experience that affect changes in premium rates.
(2) Provisions relating to the guaranteed issue and renewal of
health plan contracts.
(3) Provisions relating to the individual's right to obtain any
health plan contract the individual is eligible to enroll in pursuant
to Sections 1399.829 and 1399.837.
(4) The availability, upon request, of a listing of all the health
plan's contracts, including the rates for each health plan contract.
(b) Every solicitor or solicitor firm contracting with one or more
health plans to solicit enrollments or subscriptions from
individuals shall, when providing information on health plan
contracts to an individual but making no specific recommendations on
particular health plan contracts, do both of the following:
(1) Advise the individual of the health plan's obligation to sell
to any individual any health plan contract it offers to individuals
and provide him or her, upon request, with the actual rates that
would be charged to that individual for a given health plan contract.
(2) Notify the individual that the solicitor or solicitor firm
will procure rate and benefit information for the individual on any
health plan contract offered by a health plan whose contract the
solicitor sells.
(c) Prior to filing an application for a particular individual
health plan contract, the health plan shall obtain a signed statement
from the individual acknowledging that the individual has received
the disclosures required by this section.
1399.842. (a) At least 20 business days prior to offering a
health plan contract subject to this article, all health plans shall
file a notice of material modification with the director in
accordance with the provisions of Section 1352. The notice of
material modification shall include a statement certifying that the
health plan is in compliance with Sections 1399.821 and 1399.840. The
certified statement shall set forth the standard risk rate for each
risk category that will be used in setting the rates at which the
contract will be offered. Any action by the director, as permitted
under Section 1352, to disapprove, suspend, or postpone the health
plan's use of a health plan contract shall be in writing, specifying
the reasons that the health plan contract does not comply with the
requirements of this article.
(b) Prior to making any changes in the standard risk rates filed
with the director pursuant to subdivision (a), the health plan shall
file as an amendment a statement setting forth the changes and
certifying that the health plan is in compliance with Sections
1399.821 and 1399.840. If the standard risk rate is being changed, a
health plan may commence offering health plan contracts utilizing the
changed standard risk rate upon filing the certified statement
unless the director disapproves the amendment by written notice.
(c) Periodic changes to the standard risk rate that a health plan
proposes to implement over the course of up to 12 consecutive months
may be filed in conjunction with the certified statement filed under
subdivision (a) or (b).
(d) Each health plan shall maintain at its principal place of
business all of the information required to be filed with the
director pursuant to this article.
(e) This section shall become operative on July 1, 2009.
1399.843. (a) A health plan shall include all of the following in
the material modification notice filed pursuant to subdivision (a)
of Section 1399.842:
(1) A summary explanation of the following for each health plan
contract offered to individuals:
(A) Eligibility requirements.
(B) The full premium cost of each health plan contract in each
risk category, as defined in subdivision (k) of Section 1399.821.
(C) When and under what circumstances benefits cease.
(D) Other coverage that may be available if benefits under the
described health plan contract cease.
(E) The circumstances under which choice in the selection of
physicians and providers is permitted.
(F) Deductibles.
(G) Annual out-of-pocket maximums.
(2) A summary explanation of coverage for the following, together
with the corresponding copayments, coinsurance, and applicable
limitations for each health plan contract offered to individuals:
(A) Professional services.
(B) Outpatient services.
(C) Preventive services.
(D) Hospitalization services.
(E) Emergency health coverage.
(F) Ambulance services.
(G) Prescription drug coverage.
(H) Durable medical equipment.
(I) Mental health and substance abuse services.
(J) Home health services.
(3) The telephone number or numbers that may be used by an
applicant to access a health plan customer service representative to
request additional information about the health plan contract.
(b) The department shall share the information provided by health
plans pursuant to this article with the Office of the Patient
Advocate for purposes of the development, creation, and maintenance
of the comparative benefits matrix.
1399.844. (a) The Director of the Department of Managed Health
Care shall, in consultation with the Insurance Commissioner, an
outside actuarial firm, and health plans and insurers participating
in the individual market, no later than July 1, 2010, develop and
implement mechanisms to assist health plans and health insurers in
managing the risk of providing health coverage in the individual
market on a guarantee issue basis to the extent that these mechanisms
can improve access to individual coverage.
(b) The mechanisms required under subdivision (a) shall include
methods for collecting information regarding the enrollment, prices,
rate variance, and any other information that may be required to
monitor the condition of the individual market, the risk exposure of
individual health plans and insurers, and to implement subdivisions
(c) and (d).
(c) (1) The mechanisms developed pursuant to subdivision (a) shall
include a method by which an assessment is made of the health status
risk mix of a plan's guarantee issue products. To the extent any
plan's risk mix is disproportionately high compared to the overall
risk mix of all enrollees in guarantee issue products in the
individual market, the mechanisms developed pursuant to subdivision
(a) shall include provisions designed to make adjustments among plans
and insurers based on the relative health risk of individuals
enrolled in different health plans and health insurers. Methods to
compensate for the relative health risk assumed by health plans and
insurers shall include the ability to spread the costs to all health
plan contracts and health insurance policies in the individual
market.
(2) The director and the commissioner shall jointly adopt
regulations identifying health plans and insurers that are required
to participate in the mechanisms established pursuant to this
subdivision.
(d) (1) The director and the commissioner shall also develop as
part of the mechanisms under subdivision (a) a method for the
provision of reinsurance for health plans or insurers offering
guarantee issue products in the individual market if the age adjusted
marketwide incidence of high-cost cases or high-risk categories
significantly exceed the incidence of those cases or categories among
enrollees of the California Cooperative Health Insurance Purchasing
Pool (Cal-CHIPP) who are ineligible for the Cal-CHIPP Healthy
Families plan. This reinsurance mechanism shall be based on a uniform
standard set of service payment levels based on a methodology to be
determined by the director and the commissioner.
(2) This subdivision shall be implemented on July 1, 2010, or the
operative date of this section, whichever is later, and shall
continue to be implemented until one year after the implementation of
paragraph (4) of subdivision (d) of Section 1399.840.
(e) The director and the commissioner may contract with a
qualified actuarial firm or other entities to accomplish the
requirements of this section.
(f) No later than two years following implementation of guarantee
issue pursuant to Section 1399.829 and Section 10928 of the Insurance
Code, the director and the commissioner shall make a finding whether
and to what extent the relative risk profile of persons enrolled in
individual coverage is higher than the risk profile of those of
specified Cal-CHIPP enrollees, based on data following the first nine
months of guarantee issue. If the risk profile of those enrolled in
individual coverage is more than 5 percent higher than that of the
specified Cal-CHIPP enrollees, the director and the commissioner
shall establish a reinsurance program for individual market health
plans and insurers to compensate for the adverse risk selection.
The costs of reinsurance pursuant to this section in order
to compensate for risk profile differentials of up to 10 percent
shall be funded by a broad-based assessment across health care
service plans and health insurers. Funding to compensate
for risk profile differentials exceeding 10 percent shall be paid by
funds appropriated from the California Health Trust Fund.
1399.845. (a) The director may issue regulations that are
necessary to carry out the purposes of this article.
(b) Nothing in this article shall be construed as providing the
director with rate regulation authority.
1399.846. Sections 1399.823, 1399.826, and 1399.832 shall become
operative on January 1, 2009, and Section 1399.842 shall become
operative on July 1, 2009. The remaining sections in this article
shall become operative on July 1, 2010.
SEC. 29. Article 1 (commencing with Section 104250) is added to
Chapter 4 of Part 1 of Division 103 of the Health and Safety Code, to
read:
Article 1. California Diabetes Program
104250. The State Department of Public Health shall maintain the
California Diabetes Program, including, but not limited to, the
following:
(a) Provide information on diabetes prevention and management to
the public, including health care providers.
(b) Provide technical assistance to the Medi-Cal program,
including participating providers and Medi-Cal managed care plans,
regarding the proper scope of benefits to be provided to eligible
individuals under Section 14137.10 of the Welfare and Institutions
Code. The assistance may include, but shall not be limited to, all of
the following:
(1) Provide information on evidence-based screening guidelines,
tools, and protocols, including the distribution of these guidelines,
tools, and protocols.
(2) Develop, with assistance from the State Department of Health
Care Services, the Comprehensive Diabetes Services Program
operational screening guidelines and protocols, utilizing the most
current American Diabetes Association screening criteria for diabetes
testing in adults.
(3) Provide the Comprehensive Diabetes Services Program
operational screening guidelines, tools, and protocols, including the
distribution of those guidelines, tools, and protocols.
(4) Provide screening service criteria for diabetes and
prediabetes in accordance with the guidelines developed for the
Comprehensive Diabetes Services Program.
(5) Provide information regarding culturally and linguistically
appropriate lifestyle coaching and self-management training for
eligible adults with prediabetes and diabetes, in accordance with
evidence-based interventions to avoid unhealthy blood sugar levels
that contribute to the progression of diabetes and its complications.
(c) Provide technical assistance to the State Department of Health
Care Services, including assistance on data collection and
evaluation of the Medi-Cal program's Comprehensive Diabetes Services
Program, established pursuant to Section 14137.10 of the Welfare and
Institutions Code.
(d) This section shall be implemented only to the extent funds are
appropriated for purposes of this section in the annual Budget Act
or in another statute.
SEC. 30. Section 104376 is added to the Health and Safety Code, to
read:
104376. (a) (1) The department, in consultation with the
Department of Managed Health Care, the State Department of Health
Care Services, the Managed Risk Medical Insurance Board, and the
Department of Insurance, shall annually identify, on the basis of the
number of persons insured, the 10 largest providers of health care
coverage, including both public and private entities, and ascertain
the smoking cessation benefits provided by each of these coverage
providers.
(2) The department shall summarize the smoking cessation benefit
information gathered under this subdivision and make the benefit
summary available on the Internet, including the department's Web
site.
(b) The department shall, where appropriate, include the smoking
cessation benefit information as part of its educational efforts to
prevent tobacco use that it renders to the public and to health care
providers.
(c) The department shall conduct an evaluation, commencing one
year following the publication of the smoking cessation benefit
information on the department's Web site as provided in this section,
to assess all of the following:
(1) Any changes in the awareness of the beneficiaries of the 10
largest providers of health care coverage as to the availability of
smoking cessation benefits.
(2) Any changes in the awareness of health care providers as to
the availability of smoking cessation benefits.
(3) The extent to which smoking cessation benefits are utilized by
beneficiaries of the 10 largest providers of health care coverage,
and any changes in the utilization rate of these benefits as
determined by a comparison with any available preexisting
information.
(4) Smoking-related indicators available through the Health Plan
Employer Data and Information Set.
(5) Any changes to the smoking cessation benefit coverage of the
10 largest providers of health care coverage.
(6) The impact on smoking rates based on the expansion of
counseling services and the direct provision of tobacco cessation
pharmacotherapy by the California Smokers' Helpline.
(d) To the extent funds are appropriated for these purposes, the
department shall increase its efforts to do all of the following:
(1) Reduce smoking by increasing the capacity of effective
cessation services available from the California Smokers' Helpline,
including tobacco cessation pharmacotherapy.
(2) Expand public awareness about the services that are
available through the California Smokers' Helpline.
(3) Expand public awareness and use of existing cessation benefits
that are available to California smokers through their public and
private providers of health care coverage.
SEC. 31. Article 3 (commencing with Section 104705) is added to
Chapter 2 of Part 3 of Division 103 of the Health and Safety Code, to
read:
Article 3. Community Makeover Grants
104705. (a) The Community Makeover Grant program is hereby
created and shall be administered by the department. The department
shall award grants to local health departments to serve as local lead
agencies in accordance with this article.
(b) For purposes of determining the amount of each grant awarded
under this article, local health departments shall be allocated, at a
minimum, base funding in proportion to total available funding.
(c) Except as provided in subdivision (b), local health
departments shall receive an allocation based on each county's or
city's proportion of the statewide population, to be expended for
purposes that include, but need not be limited to:
(1) Creating a community infrastructure that promotes active
living and healthy eating.
(2) Coordinating with, at minimum, city, county, and school
partners to facilitate community level, multisector collaboration for
the development and implementation of strategies to facilitate
active living and healthy eating.
(3) Conducting competitive grant application processes to support
local grants. These local grants may be used to develop new programs
and improve existing programs to promote physical activity for
children, improve access to healthy foods, and better utilize
community recreation facilities.
(4) Preparing program interventions and materials that will be
available in accessible, and culturally and linguistically
appropriate, formats.
(d) The department shall issue guidelines for local lead agencies
on how to prepare a local plan for a comprehensive community
intervention program that includes changes to promote active living
and healthy eating, and to prevent obesity and other related chronic
diseases.
(e) The department shall specify data reporting requirements for
local lead agencies and their subcontractors.
(f) (1) The department shall conduct a fiscal and program review
on a regular basis.
(2) If the department determines that any local lead agency is not
in compliance with any provision of this article, the local lead
agency shall submit to the department, within 60 days, a plan for
complying with this article.
(3) The department may withhold funds allocated under this section
from local lead agencies that are not in compliance with this
article.
(g) For purposes of this article, "department" means the State
Department of Public Health.
104710. (a) The department may provide a variety of training,
consultation, and technical assistance to support local programs.
(b) Notwithstanding any other provision of law, the department may
use a request for proposal process or may directly award contracts
to provide the assistance described in subdivision (a) to another
state, federal, or auxiliary organization.
(c) Any organization awarded a contract under this section shall
demonstrate the ability to provide statewide assistance to accelerate
progress, and to ensure the long-term impact of local obesity
prevention programs.
104715. (a) The department shall track and evaluate
obesity-related measures, including, but not limited to, active
living, healthy eating, and community environment indicators. These
tracking and evaluation activities shall utilize scientifically
appropriate methods, and may include, but need not be limited to, the
following:
(1) Track statewide health indicators.
(2) Evaluate funded projects, determining baseline measures and
progress toward goals, as well as capturing successes and emerging
models.
(3) Compare the effectiveness of individual programs to inform
funding decisions and program modifications.
(4) Incorporate other aspects into the evaluation that have been
identified by the department in consultation with state and local
advisory groups, local health departments, and other interested
parties.
(5) Forecast health and economic cost consequences associated with
obesity.
(6) Funds permitting, utilize a sample size that is adequate to
produce county-, ethnic-, and disability-specific estimates.
(b) The purpose of the evaluation shall be to direct the most
efficient allocation of resources appropriated under this article to
accomplish the maximum reduction of obesity rates. The comprehensive
evaluation shall be designed to measure the extent to which programs
funded pursuant to this article promote the goals identified in the
California Obesity Prevention Plan.
104720. The department shall develop a campaign to educate the
public about the importance of obesity prevention that frames active
living and healthy eating as "California living." The
campaign-centered efforts shall be closely linked with
community-level program change efforts and shall be available in
accessible and culturally and linguistically appropriate formats.
104721. The department shall provide assistance and other support
for schools to promote the availability and consumption of fresh
fruits and vegetables and foods with whole grains.
104725. The department shall provide technical assistance to help
employers integrate wellness policies and programs into employee
benefit plans and worksites.
104726. Notwithstanding any other provision of law, this article
shall be implemented only to the extent funds are appropriated for
purposes of this article in the annual Budget Act or in another
statute.
SEC. 31.1. Section 124900 of the Health and Safety Code is amended
to read:
124900. (a) (1) The State Department of Health Care Services
shall select primary care clinics that are licensed under paragraph
(1) or (2) of subdivision (a) of Section 1204, or are exempt from
licensure under subdivision (c) of Section 1206, to be reimbursed for
delivering medical services, including preventive health care, and
smoking prevention and cessation health education, to program
beneficiaries.
(2) In order to be eligible to receive funds under this article a
clinic shall meet all of the following conditions, at a minimum:
(A) Provide medical diagnosis and treatment.
(B) Provide medical support services of patients in all stages of
illness.
(C) Provide communication of information about diagnosis,
treatment, prevention, and prognosis.
(D) Provide maintenance of patients with chronic illness.
(E) Provide prevention of disability and disease through
detection, education, persuasion, and preventive treatment.
(F) Meet one or both of the following conditions:
(i) Are located in an area or a facility federally designated as a
health professional shortage area, medically underserved area, or
medically underserved population.
(ii) Are clinics that are able to demonstrate that at least 50
percent of the patients served are persons with incomes at or below
250 percent of the federal poverty level.
(G) Serve as a designated primary care medical home for program
beneficiaries, as described in subdivision (c) of Section 124905.
(3) Notwithstanding the requirements of paragraph (2), all clinics
that received funds under this article in the 1997-98 fiscal year
shall continue to be eligible to receive funds under this article.
(b) As a part of the award process for funding pursuant to this
article, the department shall take into account the availability of
primary care services in the various geographic areas of the state.
The department shall determine which areas within the state have
populations which have clear and compelling difficulty in obtaining
access to primary care. The department shall consider proposals from
new and existing eligible providers to extend clinic services to
these populations.
(c) Each primary care clinic applying for funds pursuant to this
article shall demonstrate that the funds shall be used to expand
medical services, including preventive health care, and smoking
prevention and cessation health education, for program beneficiaries
above the level of services provided in the 1988 calendar year or in
the year prior to the first year a clinic receives funds under this
article if the clinic did not receive funds in the 1989 calendar
year.
(d) (1) The department, in consultation with clinics funded under
this article, shall develop a formula for allocation of funds
available. It is the intent of the Legislature that the funds
allocated pursuant to this article promote stability for those
clinics participating in programs under this article as part of the
state's health care safety net and at the same time be distributed in
a manner that best promotes access to health care to uninsured
populations.
(2) The formula shall be based on both of the following:
(A) A hold harmless for clinics funded in the 1997-98 fiscal year
to continue to reimburse them for some portion of their uncompensated
care.
(B) Demonstrated unmet need by both new and existing clinics, as
reflected in their levels of uncompensated care reported to the
department. For purposes of this article, "uncompensated care" means
clinic patient visits for persons with incomes at or below 250
percent of the federal poverty level for which there is no
encounter-based third-party reimbursement which includes, but is not
limited to, unpaid expanded access to primary care claims.
(3) The department shall allocate available funds, for a
three-year period, as follows:
(A) Clinics that received funding in the prior fiscal year shall
receive 90 percent of their prior fiscal year allocation, subject to
available funds, provided that the funding award is substantiated by
the clinics' reported levels of uncompensated care.
(B) The remaining funds beyond 90 percent shall be awarded to new
and existing applicants based on the clinics' reported levels of
uncompensated care as verified by the department according to
subparagraph (B) of paragraph (4). The department shall seek input
from stakeholders to discuss any adjustments to award levels that the
department deems reasonable, such as including base amounts for new
applicant clinics.
(C) New applicants shall be awarded funds pursuant to this
subdivision if they meet the minimum requirements for funding under
this article based on the clinics' reported levels of uncompensated
care as verified by the department according to subparagraph (A) of
paragraph (4). New applicants include applicants for any new site
expansions by existing applicants.
(4) In assessing reported levels of uncompensated care, the
department shall utilize the data available from the Office of
Statewide Health Planning and Development's (OSHPD) completed
analysis of the "Annual Report of Primary Care Clinics" for the prior
fiscal year, or if more recent data is available, then the most
recent data. If this data is unavailable for an existing applicant to
assess reported levels of uncompensated care, the existing applicant
shall receive an allocation pursuant to subparagraph (A) of
paragraph (3).
(A) The department shall utilize the most recent data available
from OSHPD's completed analysis of the "Annual Report of Primary Care
Clinics" for the prior fiscal year, or if more recent data is
available, then the most recent data.
(B) If the funds allocated to the program are less than the prior
year, the department shall allocate available funds to existing
program providers only.
(5) The department shall establish a base funding level, subject
to available funds, of no less than thirty-five thousand dollars
($35,000) for frontier clinics and Native American reservation-based
clinics. For purposes of this article, "frontier clinics" means
clinics located in a medical services study area with a population of
fewer than 11 persons per square mile.
(6) The department shall develop, in consultation with clinics
funded pursuant to this article, a formula for reallocation of unused
funds to other participating clinics to reimburse for uncompensated
care. The department shall allocate the unused funds remaining on
October 30, for the prior fiscal year to other participating clinics
to reimburse for uncompensated care.
(e) In applying for funds, eligible clinics shall submit a single
application per clinic corporation. Applicants with multiple sites
shall apply for all eligible clinics, and shall report to the
department the allocation of funds among their corporate sites in the
prior year. A corporation may only claim reimbursement for services
provided at a program-eligible clinic site identified in the
corporate entity's application for funds, and approved for funding by
the department. A corporation may increase or decrease the number of
its program-eligible clinic sites on an annual basis, at the time of
the annual application update for the subsequent fiscal years of any
multiple-year application period.
(f) Grant allocations pursuant to this article shall be based on
the formula developed by the department, notwithstanding a merger of
one of more licensed primary care clinics participating in the
program.
(g) A clinic that is eligible for the program in every other
respect, but that provides dental services only, rather than the full
range of primary care medical services, shall only be eligible to
receive funds under this article on an exception basis. A dental-only
provider's application shall include a memorandum of understanding
(MOU) with a primary care clinic funded under this article. The MOU
shall include medical protocols for making referrals by the primary
care clinic to the dental clinic and from the dental clinic to the
primary care clinic, and ensure that case management services are
provided and that the patient is being provided comprehensive primary
care as defined in subdivision (a).
(h) (1) For purposes of this article, an outpatient visit shall
include diagnosis and medical treatment services, including the
associated pharmacy, X-ray, and laboratory services, and prevention
health and case management services that are needed as a result of
the outpatient visit. For a new patient, an outpatient visit shall
also include a health assessment encompassing an assessment of
smoking behavior and the patient's need for appropriate health
education specific to related tobacco use and exposure.
(2) "Case management" includes, for this purpose, the management
of all physician services, both primary and specialty, and
arrangements for hospitalization, postdischarge care, and followup
care.
(i) (1) Payment shall be on a per-visit basis at a rate that is
determined by the department to be appropriate for an outpatient
visit as defined in this section, and shall be not less than
seventy-one dollars and fifty cents ($71.50).
(2) In developing a statewide uniform rate for an outpatient visit
as defined in this article, the department shall consider existing
rates of payments for comparable outpatient visits. The department
shall review the outpatient visit rate on an annual basis.
(j) Not later than June 1 of each year, the department shall adopt
and provide each licensed primary care clinic with a schedule for
programs under this article, including the date for notification of
availability of funds, the deadline for the submission of a completed
application, and an anticipated contract award date for successful
applicants.
(k) In administering the program created pursuant to this article,
the department shall utilize the Medi-Cal program statutes and
regulations pertaining to program participation standards, medical
and administrative recordkeeping, the ability of the department to
monitor and audit clinic records pertaining to program services
rendered to program beneficiaries and take recoupments or recovery
actions consistent with monitoring and audit findings, and the
provider's appeal rights. Each primary care clinic applying for
program participation shall certify that it will abide by these
statutes and regulations and other program requirements set forth in
this article.
SEC. 31.2. Section 124905 of the Health and Safety Code is amended
to read:
124905. (a) For purposes of this article, a "program beneficiary"
is a person whose income level is at or below 250 percent of the
federal poverty level, as adjusted annually, and who meets one of the
following requirements:
(1) Does not currently have private or employer-based health care
coverage.
(2) Is not currently enrolled in or does not qualify for public
health care coverage programs, including, but not limited to, full
scope Medi-Cal, the Healthy Families Program, the benefits package
made available under Section 14005.333 of the Welfare and
Institutions Code, subsidized coverage provided by the Managed Risk
Medical Insurance Board pursuant to Part 6.45 (commencing with
section 12699.201) of Division 2 of the Insurance Code, or coverage
made available through the Major Risk Medical Insurance Program
pursuant to Part 6.5 (commencing with section 12700) of Division 2 of
the Insurance Code.
(b) Program beneficiaries shall not be required to provide any
copayment for services that are funded pursuant to this article,
except that clinics may charge beneficiaries on a sliding fee scale
for services, but no beneficiary shall be denied services because of
an inability to pay. The department shall annually adjust this income
standard to reflect any changes in the federal poverty level.
Payment pursuant to this article shall be made only for services for
which payment will not be made through any private or public
third-party reimbursement.
(c) In order to ensure that a program beneficiary has access to
appropriate preventive and primary care, the beneficiary shall choose
a designated primary care medical home with a primary care provider
that shall maintain all of that beneficiary's medical information.
(d) In order to readily access program benefits, a program
beneficiary shall be issued a primary care card pursuant to Section
124905.1 upon the determination of eligibility.
(e) The period of eligibility under this section shall extend for
a one-year period from the date that eligibility is established. If
the program beneficiary experiences a change in circumstances which
would impact his or her eligibility, the beneficiary shall report
that change within 10 days of its occurrence.
SEC. 31.3. Section 124905.1 is added to the Health and Safety
Code, to read:
124905.1. On or before July 1, 2010, the department shall develop
an electronic system to perform all of the following functions:
(a) Provide an eligibility application for primary clinic services
made available to program beneficiaries under this article. That
application shall request all information necessary to determine
eligibility for those services.
(b) Verify annual income of applicants.
(c) Issue a primary care clinic card to an applicant who is
determined eligible for services under this article.
SEC. 31.4. Section 124910 of the Health and Safety Code is amended
to read:
124910. (a) (1) Each licensed primary care clinic, as specified
in subdivision (a) of Section 124900, applying for funds under this
article, shall demonstrate in its application that it meets all of
the following conditions, at a minimum:
(A) Provides medical diagnosis and treatment.
(B) Provides medical support services of patients in all stages of
illness.
(C) Provides communication of information about diagnosis,
treatment, prevention, and prognosis.
(D) Provides maintenance of patients with chronic illness.
(E) Provides prevention of disability and disease through
detection, education, persuasion, and preventive treatment.
(F) Meets one or both of the following conditions:
(i) Is located in an area or a facility federally designated as a
health professional shortage area, medically underserved area, or
medically underserved population.
(ii) Is a clinic in which at least 50 percent of the patients
served are persons with incomes at or below 250 percent of the
federal poverty level.
(2) Any applicant who has applied for and received a federal or
state designation for serving a health professional shortage area,
medically underserved area, or population shall be deemed to meet the
requirements of subdivision (a) of Section 124900.
(b) Each applicant shall also demonstrate to the satisfaction of
the department that the proposed services supplement, and do not
supplant, those primary care services to program beneficiaries that
are funded by any county, state, or federal program.
(c) Each applicant shall demonstrate that it is an active Medi-Cal
provider by being enrolled in Medi-Cal and diligently billing the
Medi-Cal program for services rendered to Medi-Cal eligible patients
during the past three months prior to the application due date. This
subdivision shall not apply to clinics that are not currently
Medi-Cal providers, and were funded participants pursuant to this
article during the 1993-94 fiscal year.
(d) Each application shall be evaluated by the state department
prior to funding to determine all of the following:
(1) The applicant shall provide its most recently audited
financial statement to verify budget information.
(2) The applicant's ability to deliver basic primary care to
program beneficiaries.
(3) A description of the applicant's operational quality assurance
program.
(4) The applicant's use of protocols for the most common diseases
in the population served under this article.
SEC. 31.5. Section 124920 of the Health and Safety Code is amended
to read:
124920. (a) In order to implement this section, the department
may contract with public or private entities or utilize existing
health care service provider enrollment and payment mechanisms,
including the fiscal intermediary of the Medi-Cal program.
(b) The department shall certify which primary care clinics are
selected to participate in the program for each specific fiscal year,
and how much in program funds each selected primary care clinic will
be allocated each fiscal year.
(c) The department shall pay claims from selected primary care
clinics up to each clinic's annual allocation. Once a clinic has
exhausted its annual allocation, the state shall stop paying its
program claims.
(d) The department may adjust any selected primary care clinic's
allocation to take into account:
(1) An increase in program funds appropriated for the fiscal year.
(2) A decrease in program funds appropriated for the fiscal year.
(3) A clinic's projected inability to fully spend its allocation
within the fiscal year.
(4) Surplus funds reallocated from other selected primary care
clinics.
(e) The department shall notify all affected primary care clinics
in writing prior to adjusting selected primary care clinics'
allocations.
(f) Cessation of program payments under subdivision (e) or
adjustment of selected primary care clinic's allocations under
subdivision (d) shall not be subject to the Medi-Cal appeals process
referenced in subdivision (g) of Section 124900.
(g) A clinic's allocation under this article shall not be reduced
solely because the clinic has engaged in supplemental fundraising
drives and activities, the proceeds of which have been used to defray
the costs of services to the uninsured.
SEC. 31.6. Section 124946 is added to the Health and Safety Code,
to read:
124946. The department shall seek to maximize the availability of
federal funding for services provided pursuant to this article under
the terms of any existing waiver, through amendment of any existing
waiver, or by means of a new waiver, or any combination thereof.
SEC. 32. Section 128745 of the Health and Safety Code is amended
to read:
128745. (a) Commencing July 1993, and annually thereafter, the
office shall publish risk-adjusted outcome reports in accordance with
the following schedule:
Procedures and
Publication Period Conditions
Date Covered Covered
July 1993 1988-90 3
July 1994 1989-91 6
July 1995 1990-92 9
Reports for subsequent years shall include conditions and
procedures and cover periods as appropriate.
(b) The procedures and conditions required to be reported under
this chapter shall be divided among medical, surgical, and obstetric
conditions or procedures and shall be selected by the office, based
on the recommendations of the commission and the advice of the
technical advisory committee set forth in subdivision (j) of Section
128725. The office shall publish the risk-adjusted outcome reports
for surgical procedures by individual hospital and individual surgeon
unless the office in consultation with the technical advisory
committee and medical specialists in the relevant area of practice
determines that it is not appropriate to report by individual
surgeon. The office, in consultation with the technical advisory
committee and medical specialists in the relevant area of practice,
may decide to report nonsurgical procedures and conditions by
individual physician when it is appropriate. The selections shall be
in accordance with all of the following criteria:
(1) The patient discharge abstract contains sufficient data to
undertake a valid risk adjustment. The risk adjustment report shall
ensure that public hospitals and other hospitals serving primarily
low-income patients are not unfairly discriminated against.
(2) The relative importance of the procedure and condition in
terms of the cost of cases and the number of cases and the
seriousness of the health consequences of the procedure or condition.
(3) Ability to measure outcome and the likelihood that care
influences outcome.
(4) Reliability of the diagnostic and procedure data.
(c) (1) In addition to any other established and pending reports,
on or before July 1, 2002, the office shall publish a risk-adjusted
outcome report for coronary artery bypass graft surgery by hospital
for all hospitals opting to participate in the report. This report
shall be updated on or before July 1, 2003.
(2) In addition to any other established and pending reports,
commencing July 1, 2004, and every year thereafter, the office shall
publish risk-adjusted outcome reports for coronary artery bypass
graft surgery for all coronary artery bypass graft surgeries
performed in the state. In each year, the reports shall compare
risk-adjusted outcomes by
hospital, and in every other year, by hospital and cardiac surgeon.
Upon the recommendation of the technical advisory committee based on
statistical and technical considerations, information on individual
hospitals and surgeons may be excluded from the reports.
(3) Unless otherwise recommended by the clinical panel established
by Section 128748, the office shall collect the same data used for
the most recent risk-adjusted model developed for the California
Coronary Artery Bypass Graft Mortality Reporting Program. Upon
recommendation of the clinical panel, the office may add any clinical
data elements included in the Society of Thoracic Surgeons' data
base. Prior to any additions from the Society of Thoracic Surgeons'
data base, the following factors shall be considered:
(A) Utilization of sampling to the maximum extent possible.
(B) Exchange of data elements as opposed to addition of data
elements.
(4) Upon recommendation of the clinical panel, the office may add,
delete or revise clinical data elements, but shall add no more than
a net of six elements not included in the Society of Thoracic
Surgeons' data base, to the data set over any five-year period. Prior
to any additions or deletions, all of the following factors shall be
considered:
(A) Utilization of sampling to the maximum extent possible.
(B) Feasibility of collecting data elements.
(C) Costs and benefits of collection and submission of data.
(D) Exchange of data elements as opposed to addition of data
elements.
(5) The office shall collect the minimum data necessary for
purposes of testing or validating a risk-adjusted model for the
coronary artery bypass graft report.
(d) (1) In addition to any other established and pending reports,
commencing January 1, 2010, and every year thereafter, the office
shall publish risk-adjusted outcome reports for percutaneous coronary
interventions, including, but not limited to, the use of angioplasty
or stents. In each year, the reports shall compare risk-adjusted
outcomes by hospital, and in at least every other year, by hospital
and physician. Upon the recommendation of the technical advisory
committee based on statistical and technical considerations,
information on individual hospitals and surgeons may be excluded from
the reports.
(2) The office shall establish a clinical data collection program
to collect data on percutaneous coronary interventions, including,
but not limited to, the use of angioplasty or stents, performed in
hospitals. Based upon the recommendation of the clinical advisory
panel established pursuant to Section 128748, the office shall
establish by regulation the data to be reported by each hospital at
which percutaneous coronary interventions are performed.
(3) When establishing the clinical data collection program to
collect data on percutaneous coronary interventions, the office shall
consider all of the following factors:
(A) Utilization of sampling to the maximum extent possible.
(B) Feasibility of collecting data elements.
(C) Costs and benefits of collection and submission of data.
(D) Exchange of data elements as opposed to addition of data
elements.
(4) The office shall collect the minimum data necessary for
purposes of testing or validating a risk-adjusted model for the
percutaneous coronary intervention report.
(e) The annual reports shall compare the risk-adjusted outcomes
experienced by all patients treated for the selected conditions and
procedures in each California hospital during the period covered by
each report, to the outcomes expected. Outcomes shall be reported in
the five following groupings for each hospital:
(1) "Much higher than average outcomes," for hospitals with
risk-adjusted outcomes much higher than the norm.
(2) "Higher than average outcomes," for hospitals with
risk-adjusted outcomes higher than the norm.
(3) "Average outcomes," for hospitals with average risk-adjusted
outcomes.
(4) "Lower than average outcomes," for hospitals with
risk-adjusted outcomes lower than the norm.
(5) "Much lower than average outcomes," for hospitals with
risk-adjusted outcomes much lower than the norm.
(f) For coronary artery bypass graft surgery reports and any other
outcome reports for which auditing is appropriate, the office shall
conduct periodic auditing of data at hospitals.
(g) The office shall publish in the annual reports required under
this section the risk-adjusted mortality rate for each hospital and
for those reports that include physician reporting, for each
physician.
(h) The office shall either include in the annual reports required
under this section, or make separately available at cost to any
person requesting it, risk-adjusted outcomes data assessing the
statistical significance of hospital or physician data at each of the
following three levels: 99 percent confidence level (0.01 p-value),
95 percent confidence level (0.05 p-value), and 90 percent confidence
level (0.10 p-value). The office shall include any other analysis or
comparisons of the data in the annual reports required under this
section that the office deems appropriate to further the purposes of
this chapter.
SEC. 32.5. Section 128748 of the Health and Safety Code is amended
to read:
128748. (a) This section shall apply to any risk-adjusted
outcome report that includes reporting of data by an individual
physician.
(b) (1) The office shall obtain data necessary to complete a
risk-adjusted outcome report from hospitals. If necessary data for an
outcome report is available only from the office of a physician and
not the hospital where the patient received treatment, then the
hospital shall make a reasonable effort to obtain the data from the
physician's office and provide the data to the office. In the event
that the office finds any errors, omissions, discrepancies, or other
problems with submitted data, the office shall contact either the
hospital or physician's office that maintains the data to resolve the
problems.
(2) The office shall collect the minimum data necessary for
purposes of testing or validating a risk-adjusted model. Except for
data collected for purposes of testing or validating a risk-adjusted
model, the office shall not collect data for an outcome report nor
issue an outcome report until the clinical panel established pursuant
to this section has approved the risk-adjusted model.
(c) For each risk-adjusted outcome report on a medical, surgical,
or obstetric condition or procedure that includes reporting of data
by an individual physician, the office director shall appoint a
clinical panel, which shall have nine members. Three members shall be
appointed from a list of three or more names submitted by the
physician specialty society that most represents physicians
performing the medical, surgical, and obstetric procedure for which
data is collected. Three members shall be appointed from a list of
three or more names submitted by the California Medical Association.
Three members shall be appointed from lists of names submitted by
consumer organizations. At least one-half of the appointees from the
lists submitted by the physician specialty society and the California
Medical Association, and at least one appointee from the lists
submitted by consumer organizations, shall be experts in collecting
and reporting outcome measurements for physicians or hospitals. The
panel may include physicians from another state. The panel shall
review and approve the development of the risk-adjustment model to be
used in preparation of the outcome report.
(d) For the clinical panels authorized by subdivision (c) for
coronary artery bypass graft surgery and percutaneous coronary
intervention, three members shall be appointed from a list of three
or more names submitted by the California Chapter of the American
College of Cardiology. Three members shall be appointed from list of
three or more names submitted by the California Medical Association.
Three members shall be appointed from lists of names submitted by
consumer organizations. At least one-half of the appointees from the
lists submitted by the California Chapter of the American College of
Cardiology, and the California Medical Association, and at least one
appointee from the lists submitted by consumer organizations, shall
be experts in collecting and reporting outcome measurements for
physicians and surgeons or hospitals. The panels may include
physicians from another state. The panels shall review and approve
the development of the risk-adjustment model to be used in
preparation of the outcome report.
(e) Any report that includes reporting by an individual physician
shall include, at a minimum, the risk-adjusted outcome data for each
physician. The office may also include in the report, after
consultation with the clinical panel, any explanatory material,
comparisons, groupings, and other information to facilitate consumer
comprehension of the data.
(f) Members of a clinical panel shall serve without compensation,
but shall be reimbursed for any actual and necessary expenses
incurred in connection with their duties as members of the clinical
panel.
SEC. 33. Chapter 4 (commencing with Section 128850) is added to
Part 5 of Division 107 of the Health and Safety Code, to read:
CHAPTER 4. HEALTH CARE COST AND QUALITY TRANSPARENCY
Article 1. General Provisions
128850. The Legislature hereby finds and declares all of the
following:
(a) The steady rise in health costs is eroding health access,
straining public health and finance systems, and placing an undue
burden on the state's economy.
(b) The effective use and distribution of health care data and
meaningful analysis of that data will lead to greater transparency in
the health care system resulting in improved health care quality and
outcomes, more cost-effective care, improvements in life expectancy,
reduced preventable deaths, and improved overall public health.
(c) Hospitals, physicians, health care providers, and health
insurers who have access to systemwide performance data can be called
upon to use the information to improve patient safety, efficiency of
health care delivery, and quality of care, leading to quality
improvement and costs savings throughout the health care system.
(d) The State of California is uniquely positioned to collect,
analyze, and report data on health care utilization, quality, and
costs in the state in order to facilitate value-based purchasing of
health care and to support and promote continuous quality improvement
among health plans and providers.
(e) Establishing statewide data and common measurement and
analysis of health care costs, quality, and outcomes will identify
appropriate health care utilization and ensure the highest quality of
health care services for all Californians.
(f) Comprehensive statewide data and common measurement will allow
analysis on the provision of care so that efforts can be undertaken
to improve health outcomes for all Californians, including those
groups with demonstrated health disparities.
(g) It is therefore the intent of the Legislature that the State
of California assume a leadership role in measuring performance and
value in the health care system. By establishing the primary
statewide data and common measurement and analyses of health care
costs, quality, and outcomes, and by providing sufficient revenues to
adequately analyze and report meaningful performance measures
related to health care costs, safety, and quality, the Legislature
intends to promote competition, identify appropriate health care
utilization, and ensure the highest quality of health care services
for all Californians.
(h) The Legislature further intends to reduce duplication and
inconsistency in the collection, analysis, and dissemination of
health care performance information within state government and among
both public and private entities by coordinating health care data
development, collection, analysis, evaluation, and dissemination.
(i) It is further the intent of the Legislature that the data
collected be used for the transparent public reporting of quality and
cost efficiency information regarding all levels of the health care
system, including health care service plans and health insurers,
hospitals and other health facilities, and medical groups,
physicians, and other licensed health professionals in independent
practice, so that health care plans and providers can improve their
performance and deliver safer, better health care more affordably; so
that purchasers can know which health care services reduce
morbidity, mortality, and other adverse health outcomes; so that
consumers can choose whether and where to have health care provided;
and so that policymakers can effectively monitor the health care
delivery system to ensure quality and value for all purchasers and
consumers.
(j) The Legislature further intends that all existing duties,
powers, and authority relating to health care cost, quality, and
safety data collection and reporting under current state law continue
in full effect.
128851. As used in this chapter, the following terms mean:
(a) "Administrative claims data" means data that are submitted
electronically or otherwise to, or collected by, health insurers,
health care service plans, administrators, or other payers of health
care services and that are submitted to, or collected for, the
purposes of payment to any licensed physician, medical provider
group, laboratory, pharmacy, hospital, imaging center, or any other
facility or person who is requesting payment for the provision of
medical care.
(b) "Committee" means the Health Care Cost and Quality
Transparency Committee.
(c) "Licensed health professional in independent practice" means
those licensed health professionals who can order or direct health
services or expenditures for patients who are in a category eligible
to bill Medi-Cal for services. This includes, but is not limited to,
nurse practitioners, physician assistants, dentists, chiropractors,
and pharmacists.
(d) "Data source" may include any of the following: a licensed
physician, other licensed health professional in independent
practice, medical provider group, health facility, health care
service plan licensed by the Department of Managed Health Care,
insurer certificated by the Insurance Commissioner to sell health
insurance, any state agency providing or paying for health care or
collecting health care data or information, or any other payer for
health care services in California.
(e) "Encounter data" means data relating to treatment or services
rendered by providers to patients and which may be reimbursed on a
fee-for-service or capitation basis.
(f) "Group" or "medical provider group" means an affiliation of
physicians and other health care professionals, whether a
partnership, corporation, or other legal form, with the primary
purpose of providing medical care.
(g) "Health facility" or "health facilities" means health
facilities required to be licensed pursuant to Chapter 2 (commencing
with Section 1250) of Division 2.
(h) "Office" means the Office of Statewide Health Planning and
Development.
(i) "Risk-adjusted outcomes" means the clinical outcomes of
patients grouped by diagnoses or procedures that have been adjusted
for demographic and clinical factors.
(j) "Secretary" is the Secretary of California Health and Human
Services.
128852. Any limitations on the addition of data elements pursuant
to Chapter 1 (commencing with Section 128675) shall be inapplicable
to the extent determined necessary to implement the responsibilities
under this chapter. All data collected by the office shall be
available to the committee and secretary for the purposes of carrying
out their responsibilities under this chapter. The office shall make
available to the committee any and all data files, information, and
staff resources as may be necessary to assist in and support the
responsibilities of the committee.
Article 2. Health Care Cost and Quality Transparency Committee
12855. There is hereby created in the California Health and Human
Services Agency the California Health Care Cost and Quality
Transparency Committee composed of sixteen members. The appointments
shall be made as follows:
(a) The Governor shall appoint ten members as follows:
(1) One researcher with experience in health care data and cost
efficiency research.
(2) One representative of private hospitals.
(3) One representative of public hospitals.
(4) One representative of a multi-specialty medical group.
(5) One representative of health insurers or health care service
plans.
(6) One representative of licensed health professionals in
independent practice.
(7) One representative of large employers that purchase group
health care coverage for employees and that is not also a supplier or
broker of health care coverage.
(8) One representative of a labor union.
(9) One representative of employers that purchase group health
care coverage for their employees or a representative of a nonprofit
organization that demonstrates experience working with employers to
enhance value and affordability of health care coverage.
(10) One representative of pharmacists.
(b) The Senate Committee on Rules shall appoint three members as
follows:
(1) One representative of a labor union.
(2) One representative of consumers with a demonstrated record of
advocating health care issues on behalf of consumers.
(3) One representative of physicians and surgeons who is a
practicing patient-care physician licensed in the state of
California.
(c) The Assembly Speaker shall appoint three members as follows:
(1) One representative of consumers with a demonstrated record of
advocating health care issues on behalf of consumers.
(2) One representative of small employers that purchase group
health care coverage for employees and that is not also a supplier or
broker in health care coverage.
(3) One representative of a nonprofit labor-management purchaser
coalition that has a demonstrated record of working with employers
and employee associations to enhance value and affordability in
health care.
(d) The following members shall serve in an ex officio, nonvoting
capacity:
(1) The Executive Officer of the California Public Employees
Retirement System or a designee.
(2) The Director of the Department of Managed Health Care or a
designee.
(3) The Insurance Commissioner or a designee.
(4) The Director of the Department of Public Health or a designee.
(5) The Director of the State Department of Health Care Services
or a designee.
(e) The Governor shall designate a member to serve as chairperson
for a two-year term. No member may serve more than two, two-year
terms as chairperson. All appointments shall be for four-year terms;
provided, however, that the initial term shall be two years for
members initially filling the positions set forth in paragraphs 1, 2,
4, and 6 of subdivision (a), paragraph 2 of subdivision (b), and
paragraph 2 of subdivision (c).
128856. The committee shall meet at least once every two months,
or more often if necessary to fulfill its duties.
128857. The members of the committee shall be reimbursed for any
actual and necessary expenses incurred in connection with their
duties as members of the committee.
128858. The secretary shall provide or contract for
administrative support for the committee.
128859. The committee shall do all of the following:
(a) Develop and recommend to the secretary the Health Care Cost
and Quality Transparency Plan, as provided in Article 3 (commencing
with Section 128865).
(b) Monitor the implementation of the Health Care Cost and Quality
Transparency Plan.
(c) Issue an annual public report, on or before March 1, on the
status of implementing this chapter, the resources necessary to fully
implement this chapter, and any recommendations for changes to the
statutes, regulations, or the transparency plans that would advance
the purposes of this chapter.
128860. (a) The committee shall appoint at least one technical
committee, and may appoint additional technical committees as the
committee deems appropriate, and shall include on each such committee
academic and professional experts with expertise related to the
activities of the committee.
(b) (1) The committee shall appoint at least one clinical panel
and may appoint additional panels specific to issues that require
additional or different clinical expertise. Each clinical panel shall
contain a majority of clinicians with expertise related to the
activities of the committee and any issue under consideration and
shall also include experts in collecting and reporting data. Each
clinical panel shall also include two members of the committee, one
of whom shall be a representative of hospitals or health
professionals and the other of whom shall be a representative of
consumers, purchasers or labor unions.
(2) For the initial plan, the committee shall appoint at least one
clinical panel that shall do all of the following:
(i) Issue a written report of recommendations to implement the
goals set forth by the committee, including how to measure quality
improvement, necessary data elements, and appropriate risk-adjustment
methodology. The report shall be submitted to the committee within
the time period specified by the committee. The committee shall
either adopt the recommendations of the clinical panel or by a
two-thirds vote of the committee reject the recommendations. If the
committee rejects the recommendations, it shall issue a written
finding and rationale for rejecting the recommendations. If the
committee rejects the recommendations, it shall refer the issue back
to the clinical panel and request additional or modified
recommendations in specific areas in which the committee found the
recommendations deficient.
(ii) Make recommendations to the committee concerning the specific
data to be collected and the methods of collection to implement this
chapter, assure that the results are statistically valid and
accurate, and state any limitations on the conclusions that can be
drawn from the data.
(iii) Make recommendations concerning the measures necessary to
implement the reporting requirements in a manner that is
cost-effective and reasonable for data sources and is reliable,
timely, and relevant to consumers, purchasers, and health providers.
(c) The members of the technical committees and clinical advisory
panels shall be reimbursed for any actual and necessary expenses
incurred in connection with their duties as members of the technical
committee or clinical advisory panel.
(d) The committee shall provide opportunities for participation
from consumers and patients as well as purchasers and providers at
all committee meetings.
128861. The committee, technical committee, and clinical panel
members, and any contractors, shall be subject to the
conflict-of-interest policy of the California Health and Human
Services Agency.
Article 3. Health Care Cost and Quality Transparency Plan
128865. (a) (1) The committee shall, within one year after its
first meeting, develop and recommend to the secretary an initial
Health Care Cost and Quality Transparency Plan.
(2) The committee shall periodically review and recommend updates
to the Health Care Cost and Quality Transparency Plan. The committee
shall conduct a full review every three years, and any
recommendations resulting from the review shall be subject to Section
128866.
(3) The initial plan and updates to the plan shall result in
public reporting of safety, quality and cost efficiency information
on the health care system. The purpose of the plan shall be to
improve health care cost efficiency, improve health system
performance, and promote quality patient outcomes.
(4) In developing the initial plan and updates to the plan, the
committee shall review existing data gathering and reporting,
including existing voluntary efforts.
(5) In developing the initial plan and updates to the plan, the
committee shall obtain the recommendation of the relevant clinical
panel or panels, if any, on the measures to be reported.
(b) The plan shall include, but not be limited to, strategies to:
(1) Measure, and collect data related to, health care safety and
quality, utilization, health outcomes, and cost of health care
services from health plans and insurers, medical groups, health
facilities, licensed physicians and other licensed health
professionals in independent practice.
(2) Measure each of the performance domains, including, but not
limited to, safety, timeliness, effectiveness, efficiency, quality,
equity, and other domains as appropriate.
(3) Develop a valid and reliable methodology for collecting and
reporting cost and quality information to ensure the integrity of the
data and reflect the intensity, cost, and scope of services provided
and that the data is collected from the most appropriate data
source.
(4) Measure and collect data related to disparities in health
outcomes among various populations and communities, including racial
and ethnic groups.
(5) Use and build on existing data collection standards, methods,
and definitions to the greatest extent possible to accomplish the
goals of this chapter in an efficient and effective manner, including
those data collected by the state and federal governments.
(6) Incorporate and utilize administrative claims data to the
extent that it is the most efficient method of collecting valid and
reliable data.
(7) Improve coordination, alignment, and timeliness of data
collection, state and federal reporting practices and standards, and
existing mandatory and voluntary measurement and reporting activities
by existing public and private entities, taking into account the
reporting burden on providers.
(8) Provide public reports, analyses, and data on the health care
quality, safety, and performance measures of health plans and
insurers, medical groups, health facilities, licensed physicians, and
other licensed health professionals in independent practice, that
are accurate, statistically valid, and descriptive of how the data
were derived.
(9) Maintain patient confidentiality consistent with state and
federal medical and patient privacy laws.
(10) Coordinate and streamline existing related data collection
and reporting activities within state government.
(11) Participate in the monitoring of implementation of the plan,
including a timeline and prioritization of the planned data
collection, analyses and reports.
(12) Participate in the
monitoring of data collection, continuous quality improvement, and
reporting functions.
(13) Assess compliance with data collection requirements needed to
implement this chapter.
(14) Recommend a fee schedule sufficient to fund the
implementation of this chapter.
(c) The secretary may contract with a qualified public or private
agency or academic institution to assist in the review of existing
data collection programs or to conduct other research or analysis
deemed necessary for the committee or secretary to complete and
implement the Health Care Cost and Quality Transparency Plan or to
meet the obligations of this chapter.
128866. (a) Within 60 days of receipt of the Health Care Cost and
Quality Transparency Plan recommended by the committee, the
secretary shall do one of the following:
(1) Advise the committee that the recommended plan is accepted and
implementing regulations shall be drafted and submitted to the
Office of Administrative Law pursuant to the Administrative
Procedures Act, Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of Title 2 of the Government Code.
(2) Refer the plan back to the committee and request additional or
modified recommendations in specific areas in which the secretary
finds the plan is deficient. If referred back to the committee, the
secretary shall respond to any modified recommendation in the manner
provided in this section.
(b) Every six years after implementation, commencing with 2014,
the secretary shall report to the Legislature on the work of the
committee and whether the committee should be continued in the manner
described in this article or whether changes should be made to the
law.
Article 4. Implementation of Health Care Cost and Quality
Transparency Plan
128867. (a) After acceptance of the plan pursuant to Section
128866, the secretary shall be responsible for timely implementation
of the approved plan. The secretary shall assure timely
implementation by the office, which shall include, but not be limited
to, the following:
(1) Provide data, information, and reports as may be required by
the committee to assist in its responsibilities under this chapter
(2) Determine the specific data to be collected and the methods of
collection to implement this chapter, consistent with the approved
plan, and assure that the results are statistically valid and
accurate as well as risk-adjusted where appropriate.
(3) Determine the measures necessary to implement the reporting
requirements in a manner that is cost-effective and reasonable for
data sources and is reliable, timely, and relevant for consumers,
purchasers, and providers.
(4) Collect the data consistent with the data reporting
requirements of the approved plan including, but not limited to, data
on quality, health outcomes, cost, and utilization.
(5) Audit, as necessary, the accuracy of any and all data
submitted pursuant to this chapter.
(6) Seek to establish agreements for voluntary reporting of health
care claims and data from any and all health care data sources that
are not subject to mandatory reporting pursuant to this chapter in
order to assure the most comprehensive systemwide data on health care
costs and quality.
(7) Fully protect patient privacy and confidentiality, in
compliance with state and federal privacy laws, while preserving the
ability to analyze the data. Any individual patient information
obtained pursuant to this chapter shall be exempt from the disclosure
requirements of the Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1 of the Government Code.
(9) Adopt the same procedures for health care providers as those
specified in Section 128750 and adopt substantially similar
procedures for other data sources to ensure that all data sources
identified in any outcome report have a reasonable opportunity to
review, comment on, and appeal any outcome report in which the data
source is identified before it is released to the public.
(b) The secretary and office shall consult with the committee in
implementing this chapter, and shall cooperate with the committee in
fulfilling the committee's responsibility to monitor implementation
activities.
(c) All state agencies shall cooperate with the secretary and the
office to implement the Health Care Cost and Quality Transparency
Plan approved by the secretary.
(d) The secretary or the office shall adopt regulations necessary
to carry out the intent of this chapter.
128868. Nothing in this chapter shall be construed to authorize
the disclosure of any confidential information concerning contracted
rates between health care providers and payers or any other data
source, but nothing in this section shall prevent the disclosure of
information on the relative or comparative cost to payers or
purchasers of health care services, consistent with the requirements
of this chapter.
128869. (a) Patient social security numbers and any other data
elements that the office believes could be used to determine the
identity of an individual patient shall be exempt from the disclosure
requirements of the California Public Records Act (Chapter 3.5
(commencing with Section 6250) of Division 7 of Title 1 of the
Government Code).
(b) No person reporting data pursuant to this section shall be
liable for damages in any action based on the use or misuse of
patient-identifiable data that has been mailed or otherwise
transmitted to the office pursuant to the requirements of this
chapter.
(c) No communication of data or information by a data source to
the committee, the secretary or the office shall constitute a waiver
of privileges preserved by Sections 1156, 1156.1, or 1157 of the
Evidence Code or of Section 1370 of the Health and Safety Code.
(d) Information, documents or records from original sources
otherwise subject to discovery or introduction into evidence shall
not be immune from discovery or introduction into evidence merely
because they were also provided to the committee or office pursuant
to this chapter.
128870. The office shall solicit input from interested
stakeholders and convene meetings to receive input on the creation of
a fee schedule to implement the provisions of this section. This
stakeholder process shall occur in a manner that allows for
meaningful review of the information and fiscal projections by the
interested stakeholders. After the stakeholder process has been
convened and used in the development of a proposal, the office shall
provide the secretary with a proposal that will, to the extent
possible, identify a fee schedule and other financial resources for
the implementation of this chapter and allow for the recovery of
costs of implementing centralized data collection, and effective
analysis and reporting activities under this chapter.
(b) The schedule of fees, including specific fees charged to each
data source and user, shall be approved by the Legislature and
Governor in the annual Budget Act. The annual budget of the committee
shall be presented and justified to the Legislature with an annual
work plan including a description of the data sources, data,
elements, use of the data and the number and frequency of reports to
be made available.
(c) The total amount of fees charged by the office to a hospital
to recover the costs of implementing this chapter, and the fees
charged to that hospital pursuant to Section 127280 of the Health and
Safety Code shall not exceed 0.06 percent of the gross operating
cost of the hospital for the provision of health care services for
its last fiscal year that ended on or before June 30 of the preceding
calendar year.
128871. There is hereby established in the State Treasury the
Health Care Cost and Quality Transparency Fund to support the
implementation of this chapter. All fees and contributions collected
by the office pursuant to Section 128870 shall be deposited in this
fund and used to support the implementation of this chapter.
Expenditures shall be subject to appropriation in the annual Budget
Act.
SEC. 34. Section 130545 is added to the Health and Safety Code, to
read:
130545. (a) The State Department of Health Care Services shall
identify best practices related to e-prescribing modalities and
standards and shall make recommendations for statewide adoption of
e-prescribing on or before January 1, 2009.
(b) The State Department of Health Care Services shall develop a
pilot program to foster the adoption and use of electronic
prescribing by health care providers that contract with Medi-Cal. The
implementation of this Medi-Cal pilot is contingent upon the
availability of FFP or federal grant funds. The department may
provide electronic prescribing technology, including equipment and
software, to participating Medi-Cal prescribers.
SEC. 34.3. Section 796.02 of the Insurance Code is amended to
read:
796.02. (a) Compensation of a person retained by a disability
insurer to review claims for health care services shall not be based
on either of the following:
(1) A percentage of the amount by which a claim is reduced for
payment.
(2) The number of claims or the cost of services for which the
person has denied authorization or payment.
(b) This section shall become inoperative on December 1, 2008,
and, as of January 1, 2009, is repealed, unless a later enacted
statute, that becomes operative on or before January 1, 2009, deletes
or extends the dates on which it becomes inoperative and is
repealed.
SEC. 34.5. Section 796.02 is added to the Insurance Code, to read:
796.02. (a) Compensation of a person employed by or contracted
with a disability insurer to review claims or eligibility for health
care services shall not be based on either of the following:
(1) A percentage of the amount by which a claim is reduced for
payment.
(2) The number of claims or the cost of services for which the
person has denied authorization or payment.
(b) This section shall become operative on December 1, 2008.
SEC. 34.7. Section 796.05 is added to the Insurance Code, to read:
796.05. (a) No disability insurer shall set performance goals or
quotas or provide additional compensation to any person employed by
or contracted with the disability insurer based on the number of
persons for which coverage is rescinded or the financial savings to
the disability insurer associated with the rescission of coverage.
(b) This section shall become operative on December 1, 2008.
SEC. 35. Section 10113.10 is added to the Insurance Code, to read:
10113.10. (a) Notwithstanding Section 10270.95 and except as
provided in subdivision (f), a health insurer selling health
insurance shall, on and after July 1, 2010, expend in the form of
health care benefits no less than 85 percent of the aggregate dues,
fees, premiums, or other periodic payments received by the insurer.
For purposes of this section, the insurer may deduct from the
aggregate dues, fees, premiums, or other periodic payments received
by the insurer the amount of income taxes or other taxes that the
insurer expensed. For purposes of this section, "health care benefits"
shall mean health care services that are either provided or
reimbursed by the insurer or its contracted providers as benefits to
its policyholders and insurers.
(b) (1) In addition to the health care benefits defined in
subdivision (a), health care benefits shall include:
(A) The costs of programs or activities, including training and
the provision of informational materials that are determined as part
of the regulation under subdivision (d) to improve the provision of
quality care, improve health care outcomes, or encourage the use of
evidence-based medicine.
(B) Disease management expenses using cost-effective
evidence-based guidelines.
(C) Plan medical advice by telephone.
(D) Payments to providers as risk pool payments of
pay-for-performance initiatives.
(2) Health care benefits shall not include administrative costs
listed in Section 1300.78 of Title 28 of the California Code of
Regulations in effect on January 1, 2007.
(c) To assess compliance with this section, an insurer with a
valid certificate of authority may average its total costs across all
health insurance policies issued, amended, or renewed in California,
and all health care service plan contracts issued, amended, or
renewed by its affiliated health care service plans which are
licensed to operate in California, except for those contracts listed
in subdivision (f) of Section 1378.1 of the Health and Safety Code.
(d) The department and the Department of Managed Health Care shall
jointly adopt and amend regulations to implement this section and
Section 1378.1 of the Health and Safety Code to establish uniform
reporting by health care service plans and insurers of the
information necessary to determine compliance with this section.
These regulations may include additional elements in the definition
of health care benefits not identified in paragraph (1) of
subdivision (b) in order to consistently operationalize the
requirements of this section among health insurers and health plans,
but such regulatory additions shall be consistent with the
legislative intent that health insurers expend at least 85 percent of
aggregate payments as provided in subdivision (a) on health care
benefits.
(e) The department may exclude from the determination of
compliance with the requirement of subdivision (a) any new health
insurance policies for up to the first two years that these policies
are offered for sale in California, provided that the commissioner
determines that the new policies are substantially different from the
existing policies being issued, amended, or renewed by the insurer
seeking the exclusion.
(f) This section shall not apply to Medicare supplement policies,
short-term limited duration health insurance policies, vision-only,
dental-only, behavioral health-only, pharmacy-only policies,
CHAMPUS-supplement or TRICARE-supplement insurance policies, or to
hospital indemnity, hospital-only, accident-only, or specified
disease insurance policies that do not pay benefits on a fixed
benefit, cash payment only basis.
SEC. 36. Section 10113.11 is added to the Insurance Code, to read:
10113.11. (a) A health insurer may provide notice by electronic
transmission and shall be deemed to have fully complied with the
specific statutory or regulatory requirements to provide notice by
United States mail to an applicant or insured if it complies with all
of the following requirements:
(1) Obtains authorization from the applicant or insured to provide
notices by electronic transmission and to cease providing notices by
United States mail. "Authorization" means the agreement by the
applicant, enrollee, or subscriber through interactive voice
response, the Internet or other similar medium, or in writing, to
receive notices by electronic transmission.
(2) Uses an authorization process, approved by the department, in
which the applicant or insured confirms understanding of and
agreement with the specific notices or materials that will be
provided by electronic transmission.
(3) Complies with the specific statutory or regulatory
requirements as to the content of the notices it sends by electronic
transmission.
(4) Provides for the privacy of the notice as required by state
and federal laws and regulations.
(5) Allows the applicant or insured at any time to terminate the
authorization to provide notices by electronic transmission and
receive the notices through the United States mail, if specific
statutory or regulatory requirements require notice by mail.
(6) Sends the electronic transmission of a notice to the last
known electronic address of the applicant or insured. If the
electronic transmission of the notice fails to reach its intended
recipient twice, the health insurer shall resume sending all notices
to the last known United States mail address of the applicant or
insured.
(7) Maintains an Internet Web site where the applicant or insured
may access the notices sent by electronic transmission.
(8) Informs the applicant, enrollee, or subscriber how to
terminate the authorization to provide notices sent by electronic
transmission.
(b) A health insurer shall not use the electronic mail address of
an applicant or insured that it obtained for the purposes of
providing notice pursuant to subdivision (a) for any purpose other
than communicating with the enrollee, applicant, or subscriber about
his or her policy, plan, or benefits.
(c) No person other than the applicant or insured to whom the
medical information in the notice pertains or a representative
lawfully authorized to act on behalf of the applicant or insured, may
authorize the transmission of medical information by electronic
transmission. "Medical information" for these purposes shall have the
meaning set forth in subdivision (g) of Section 56.05 of the Civil
Code. The transmission of any medical information, as that term is
used in subdivision (g) of Section 56.05 of the Civil Code, shall
comply with the Confidentiality of Medical Information Act (Part 2.6
(commencing with Section 56) of Division 1 of the Civil Code).
(d) A notice transmitted electronically pursuant to this section
is a private and confidential communication, and it shall be unlawful
for a person, other than the applicant or insured to whom the notice
is addressed, to read or otherwise gain access to the notice without
the express, specific permission of the notice's addressee. This
subdivision shall not apply to a health care provider, health
insurer, or contractor of a health care provider or health insurer of
an applicant or insured if the health care provider, health care
insurer, or contractor of a health care provider or health insurer is
authorized to have access to the medical information pursuant to the
Confidentiality of Medical Information Act (Part 2.6 (commencing
with Section 56) of Division 1 of the Civil Code).
(e) A health insurer may not impose additional fees or a
differential if an applicant or insured elects not to receive notices
by electronic transmissions.
(f) Notices that may be made by electronic transmission include
explanation of benefits; distribution of the insurer's policies and
certificates of coverage; a list of contracting providers; responses
to inquiries from insureds; changes in rates pursuant to Sections
10113.7 and 10901.3; and notices related to underwriting decisions
pursuant to Section 791.10. A health insurer may not transmit through
electronic means any notice that may affect the eligibility for, or
continued enrollment in, coverage.
SEC. 37. Section 10123.56 is added to the Insurance Code, to read:
10123.56. (a) On and after January 1, 2009, every policy of
health insurance, except for a Medicare supplement policy, that
covers hospital, medical, or surgical expenses on a group basis shall
offer to include a Healthy Action Incentives and Rewards Program, as
described in subdivision (b), to be implemented in connection with a
health insurance policy, under such terms and conditions as may be
agreed upon between the group policyholder and the health insurer.
Every insurer shall communicate the availability of that program to
all prospective group policyholders with whom it is negotiating and
to existing group policyholders upon renewal.
(b) For purposes of this section, benefits under a Healthy Action
Incentives and Rewards Program shall provide for all of the following
where appropriate:
(1) Health risk appraisals to be used to assess an individual's
overall health status and to identify risk factors, including, but
not limited to, smoking and smokeless tobacco use, alcohol abuse,
drug use, and nutrition and physical activity practices.
(2) Enrollee access to an appropriate health care provider, as
medically necessary, to review and address the results of the health
risk appraisal. In addition, where appropriate, the Healthy Action
Incentives and Rewards Program may include follow-up through a
Web-based tool or a nurse hotline either in combination with a
referral to a provider or separately.
(3) Incentives or rewards for policyholders to become more engaged
in their health care and to make appropriate choices that support
good health, including obtaining health risk appraisals, screening
services, immunizations, or participating in healthy lifestyle
programs and practices. These programs and practices may include, but
need not be limited to, smoking cessation, physical activity, or
nutrition. Incentives may include, but need not be limited to, health
premium reductions, differential copayment or coinsurance amounts,
and cash payments. Rewards may include, but need not be limited to,
nonprescription pharmacy products or services not otherwise covered
under a policyholder's health insurance policy, exercise classes, gym
memberships, and weight management programs. If an insurer elects to
offer an incentive in the form of a reduction in the premium amount,
the premium reduction shall be standardized and uniform for all
groups and policyholders and shall be offered only after the
successful completion of the specified program or practice by the
insured or policyholder.
(c) (1) An insurer subject to this section shall offer and price
all Healthy Action Incentives and Rewards Programs approved by the
commissioner consistently across all groups, potential groups, and
individuals and offer and price the programs without regard to the
health status, prior claims experience, or risk profile of the
members of a group. An insurer shall not condition the offer,
delivery, or renewal of a policy that covers hospital, medical or
surgical expenses on the group's purchase, acceptance or enrollment
in a Healthy Action Incentives and Rewards Program. Rewards and
incentives established in the program may not be designed, provided,
or withheld based on the actual health service utilization or health
care claims experience of the group, members of the group, or the
individual.
(2) In order to demonstrate compliance with this section, a health
insurer shall file the program description and design with the
commissioner. The commissioner shall disapprove, suspend, or withdraw
any product or program developed pursuant to this section if the
commissioner determines that the product or product design has the
effect of allowing insurers to market, sell, or price health coverage
for healthier lower risk profile groups in a preferential manner
that is inconsistent with the requirement to offer, market and sell
products pursuant to Chapter 8 (commencing with Section 10700) and
Chapter 9.6 (commencing with Section 10919).
(d) This section shall supplement, and not supplant, any other
section in this chapter concerning requirements for insurers to
provide health care services, childhood immunizations, adult
immunizations, and preventive care services.
(e) This section shall only be implemented if and to the extent
allowed under federal law. If any portion of this section is held to
be invalid, as determined by a final judgment of a court of competent
jurisdiction, this section shall become inoperative.
SEC. 38. Section 10176.15 is added to the Insurance Code, to read:
10176.15. For purposes of subdivision (d) of Section 10176.10,
"comparable benefits" means any health insurance policy in the same
coverage choice category, as determined by the department and the
Department of Managed Health Care pursuant to Section 10930, that a
closed block of business would have been in had that block of
business not been closed. If the coverage benefits provided in the
closed block of business do not meet or exceed the minimum health
care coverage requirements of Section 10923, they shall be deemed
comparable to the lowest coverage choice category.
SEC. 39. Section 10273.6 of the Insurance Code is amended to read:
10273.6. All individual health benefit plans, except for
short-term limited duration insurance, shall be renewable with
respect to all eligible individuals or dependents at the option of
the individual except as follows:
(a) For nonpayment of the required premiums or contributions by
the individual in accordance with the terms of the health insurance
coverage or the timeliness of the payments.
(b) For fraud or intentional misrepresentation of material fact
under the terms of the coverage by the individual.
(c) Movement of the individual contractholder outside the service
area but only if coverage is terminated uniformly without regard to
any health status-related factor of covered individuals.
(d) If the disability insurer ceases to provide or arrange for the
provision of health care services for new individual health benefit
plans in this state; provided, however, that the following conditions
are satisfied:
(1) Notice of the decision to cease new or existing individual
health benefit plans in this state is provided to the commissioner
and to the individual policy or contractholder at least 180 days
prior to discontinuation of that coverage.
(2) Individual health benefit plans shall not be canceled for 180
days after the date of the notice required under paragraph (1) and
for that business of a disability insurer that remains in force, any
disability insurer that ceases to offer for sale new individual
health benefit plans shall continue to be governed by this section
with respect to business conducted under this section.
(3) A disability insurer that ceases to write new individual
health benefit plans in this state after the effective date of this
section shall be prohibited from offering for sale individual health
benefit plans in this state for a period of five years from the date
of notice to the commissioner.
(e) If the disability insurer withdraws an individual health
benefit plan from the market; provided, that the disability insurer
notifies all affected individuals and the commissioner at least 90
days prior to the discontinuation of these plans, and that the
disability insurer makes available to the individual all health
benefit plans that it makes available to new individual businesses
without regard to a health status-related factor of enrolled
individuals or individuals who may become eligible for the coverage.
This section shall become inoperative on the date that Section
10937 becomes operative.
SEC. 42. Chapter 9.6 (commencing with Section 10919) is added to
Part 2 of Division 2 of the Insurance Code, to read:
CHAPTER 9.6. INDIVIDUAL MARKET REFORM AND GUARANTEE ISSUE
10919. It is the intent of the Legislature to do both of the
following:
(a) Guarantee the
availability and renewability of health coverage through the private
health insurance market to individuals.
(b) Require that health care service plans and health insurers
issuing coverage in the individual market compete on the basis of
price, quality, and service, and not on risk selection.
10920. For purposes of this chapter, the following terms shall
have the following meanings:
(a) "Anniversary date" means the calendar date one year from, and
each subsequent year thereafter, the date an individual enrolls in a
health insurance policy.
(b) "Coverage choice category" means the category of health
insurance policies and health plan contracts established by the
department and the Department of Managed Health Care pursuant to
Section 10930.
(c) "Dependent" means the spouse, registered domestic partner, or
child of an individual, subject to applicable terms of the health
insurance policy covering the individual.
(d) "Health insurance policy" means an individual disability
insurance policy offered, sold, amended, or renewed to individuals
and their dependents that provides coverage for hospital, medical, or
surgical benefits. The term shall not include any of the following
kinds of insurance:
(1) Accidental death and accidental death and dismemberment.
(2) Disability insurance, including hospital indemnity,
accident-only, and specified disease insurance that pays benefits on
a fixed benefit, cash-payment-only basis.
(3) Credit disability, as defined in Section 779.2.
(4) Coverage issued as a supplement to liability insurance.
(5) Disability income, as defined in subdivision (i) of Section
799.01.
(6) Insurance under which benefits are payable with or without
regard to fault and that is statutorily required to be contained in
any liability insurance policy or equivalent self-insurance.
(7) Insurance arising out of a workers' compensation or similar
law.
(8) Long-term care coverage.
(9) Dental coverage.
(10) Vision coverage.
(11) Medicare supplement, CHAMPUS-supplement or
Tricare-supplement, behavioral health-only, pharmacy-only, hospital
indemnity, hospital-only, accident-only, or specified disease
insurance that does not pay benefits on a fixed benefit,
cash-payment-only basis.
(e) "Health insurer" means a disability insurer that offers and
sells health insurance.
(f) "Health plan" means a health care service plan, as defined in
subdivision (f) of Section 1345 of the Health and Safety Code, that
is lawfully engaged in providing, arranging, paying for, or
reimbursing the cost of health care services and is offering or
selling health care service plan contracts in the individual market.
A health plan shall not include a specialized health care service
plan.
(g) "Health plan contract" means an individual health care service
plan contract offered, sold, amended, or renewed to individuals and
their dependents and shall not include long-term care insurance,
dental, or vision coverage. In addition, the term shall not include a
specialized health care service plan contract, as defined in
subdivision (o) of Section 1345 of the Health and Safety Code.
(h) "Purchasing pool" means the program established under Part
6.45 (commencing with Section 12699.201).
(i) "Rating period" means the period for which premium rates
established by an insurer are in effect and shall be no less than 12
months beginning on the effective date of the subscriber's health
insurance policy.
(j) "Risk adjustment factor" means the percentage adjustment to be
applied to the standard risk rate for a particular individual, based
upon any expected deviations from standard claims due to the health
status of the individual.
(k) "Risk category" means the following characteristics of an
individual: age, geographic region, and family composition of the
individual, plus the health insurance policy selected by the
individual.
(1) No more than the following age categories may be used in
determining premium rates:
Under 1.
1-18.
19-24.
25-29.
30-34.
35-39.
40-44.
45-49.
50-54.
55-59.
60-64.
65 and over.
However, for the 65 and over age category, separate premium rates
may be specified depending upon whether coverage under the health
insurance policy will be primary or secondary to benefits provided by
the federal Medicare Program pursuant to Title XVIII of the federal
Social Security Act.
(2) Health insurers shall determine rates using no more than the
following family size categories:
(A) Single.
(B) More than one child 18 years of age or under and no adults.
(C) Married couple or registered domestic partners.
(D) One adult and child.
(E) One adult and children.
(F) Married couple and child or children, or registered domestic
partners and child or children.
(3) (A) In determining rates for individuals, a health insurer
that operates statewide shall use no more than nine geographic
regions in the state, have no region smaller than an area in which
the first three digits of all its ZIP Codes are in common within a
county, and divide no county into more than two regions. Health
insurers shall be deemed to be operating statewide if their coverage
area includes 90 percent or more of the state's population.
Geographic regions established pursuant to this section shall, as a
group, cover the entire state, and the area encompassed in a
geographic region shall be separate and distinct from areas
encompassed in other geographic regions. Geographic regions may be
noncontiguous.
(B) (i) In determining rates for individuals, a health insurer
that does not operate statewide shall use no more than the number of
geographic regions in the state that is determined by the following
formula: the population, as determined in the last federal census, of
all counties that are included in their entirety in a health insurer'
s service area divided by the total population of the state, as
determined in the last federal census, multiplied by nine. The
resulting number shall be rounded to the nearest whole integer. No
region may be smaller than an area in which the first three digits of
all its ZIP Codes are in common within a county and no county may be
divided into more than two regions. The area encompassed in a
geographic region shall be separate and distinct from areas
encompassed in other geographic regions. Geographic regions may be
noncontiguous. No health insurer shall have less than one geographic
area.
(ii) If the formula in clause (i) results in a health insurer that
operates in more than one county having only one geographic region,
then the formula in clause (i) shall not apply and the health insurer
may have two geographic regions, provided that no county is divided
into more than one region.
Nothing in this section shall be construed to require a health
insurer to establish a new service area or to offer health insurance
on a statewide basis, outside of the health insurer's existing
service area.
(4) A health insurer may rate its entire portfolio of health
insurance policies in accordance with expected costs or other market
considerations, but the rate for each health insurance policy shall
be set in relation to the balance of the portfolio, as certified by
an actuary.
(5) Each health insurance policy shall be priced as determined by
each health insurer to reflect the difference in benefit variation,
or the effectiveness of a provider network, and each insurer may
adjust the rate for a specific policy for risk selection only to the
extent permitted by subdivision (d) of Section 10937.
(l) "Standard risk rate" means the rate applicable to an
individual in a particular risk category.
(m) "Subscriber" means the individual who is enrolled in a health
insurance policy, is the basis for eligibility for enrollment in the
policy, and is responsible for payment to the health insurer.
10922. On and after March 31, 2009, a health insurer shall not
offer to an individual a health insurance policy that provides less
than minimum creditable coverage, as defined by the Managed Risk
Medical Insurance Board pursuant to Section 12739.50.
10925. (a) Notwithstanding Chapter 15 (commencing with Section
8899.50) of Division 1 of Title 2 of the Government Code and Section
10922, a health insurer may renew an individual health insurance
policy for anyone enrolled on March 1, 2009, indefinitely without
increasing benefits to meet the required minimum creditable coverage
established by the Managed Risk Medical Insurance Board pursuant to
Section 12739.50. Those individual health insurance policies,
however, may not be offered to new enrollment, unless they are
amended to meet the minimum creditable coverage established by the
Managed Risk Medical Insurance Board pursuant to Section 12739.50. In
offering those policies for renewal, rates determined by health
insurers shall meet the requirements of Sections 10920 and 10937. An
individual who maintains coverage in a health insurance policy
pursuant to this section shall be deemed to be in compliance with
Section 8899.50 of the Government Code.
(b) A health insurer shall not cease to renew coverage in an
individual health insurance policy described in subdivision (a)
except as permitted pursuant to Section 10176.10.
(c) On and after March 1, 2009, the director shall not approve for
offer and sale in this state any new individual health insurance
policy that does not meet or exceed the minimum creditable coverage
requirements established by the Managed Risk Medical Insurance Board
pursuant to Section 12739.50.
(d) Effective July 1, 2010, all individual health insurance
policies approved, offered, and sold prior to March 1, 2009, that do
not comply with minimum creditable coverage standards adopted by the
Managed Risk Medical Insurance Board pursuant to Section 12739.50,
exclusively because the policy includes a lifetime benefit maximum
inconsistent with the standard minimum creditable coverage shall be
modified to comply with the standards for minimum creditable
coverage.
(e) This section shall become operative on January 1, 2009.
10926. A health insurer shall, in addition to complying with the
applicable provisions of this code and the applicable rules of the
commissioner, comply with this chapter.
10927. This chapter shall not apply to health insurance policies
for coverage of Medicare services pursuant to contracts with the
United States government, Medicare supplement, Medi-Cal contracts
with the State Department of Health Care Services, Healthy Families
Program contracts with the Managed Risk Medical Insurance Board,
long-term care coverage, specialized health care service plan
contracts, as defined in subdivision (o) of Section 1345 of the
Health and Safety Code, or the purchasing pool established under Part
6.45 (commencing with Section 12699.201).
10928. (a) Except for the health insurance policies described in
subdivision (a) of Section 10925, a health insurer shall fairly and
affirmatively offer, market, and sell all of the insurer's policies
that are sold to individuals to all individuals in each service area
in which the health insurer provides or arranges for the provision of
health care services.
(b) A health insurer may not reject an application from an
individual, or his or her dependents, for an individual health
insurance policy, or refuse to renew an individual health insurance
policy, if all of the following requirements are met:
(1) The individual agrees to make the required premium payments.
(2) The individual and his or her dependents who are to be covered
by the health insurance policy work or reside in the service area in
which the health insurer provides or otherwise arranges for the
provision of health care services.
(3) The individual provides the information requested on the
application to determine the appropriate rate.
(c) Notwithstanding subdivision (b), if an individual, or his or
her dependents, applies for a health insurance policy in a coverage
choice category for which he or she is not eligible pursuant to
Section 10934, the health insurer may reject that application
provided that the insurer also offers the individual and his or her
dependents coverage in the appropriate coverage choice category.
(d) Notwithstanding subdivision (b), a health insurer is not
required to renew an individual health insurance policy if any of the
conditions listed in subdivision (a) of Section 10936 are met.
(e) Notwithstanding any other provision of this chapter or of a
health insurance policy, every health insurer shall comply with the
requirements of Chapter 7 (commencing with Section 3750) of Part 1 of
Division 9 of the Family Code and Section 14124.94 of the Welfare
and Institutions Code.
(f) A health insurer may require an individual to provide
information on his or her health status or health history, or that of
his or her dependents, in the application for enrollment to the
extent required to apply the risk adjustment factor permitted
pursuant to subdivision (d) of Section 10937. The health insurer
shall use the standardized form and uniform evaluation process
developed for this purpose by the Director of the Department of
Managed Health Care pursuant to Section 1399.840 of the Health and
Safety Code. After the individual health insurance policy's effective
date of coverage, a health insurer may request that the enrollee
provide information voluntarily on his or her health history or
health status, or that of his or her dependents, for purposes of
providing care management services, including disease management
services.
(g) Notwithstanding subdivision (b), a health insurer may reject
an application for any person who has been a resident of California
for six months or less unless one of the following applies: (1) the
person is a federally eligible defined individual pursuant to Section
10785 or Section 1399.801 of the Health and Safety Code; or (2) the
person can demonstrate a minimum of two years of prior creditable
coverage at least equivalent to the minimum creditable coverage
developed by the Managed Risk Medical Insurance Board pursuant to
Section 12739.50 and providing the person applies for coverage in
California within 62 days of termination or cancellation of the prior
creditable coverage.
(h) Notwithstanding subdivision (b), a health plan may reject an
application for coverage from either of the following:
(1) A person who is exempt from the requirements of Section
8899.50 of the Government Code because the person or family has an
income at or below 250 percent of the federal poverty level and the
person's or family's share of premium for minimum creditable coverage
exceeds 5 percent of his or her family income, except for those
individuals meeting the criteria in paragraph (1) or (2) of
subdivision (g).
(2) A person exempted from the requirements of Section 8899.50 of
the Government Code pursuant to any exemption authorized or granted
by the Managed Risk Medical Insurance Board pursuant to Section
12739.501, for the time period of the exemption, as determined by the
board.
(i) Notwithstanding Section 10944, this section shall not become
operative until the authority under Section 12739.51 is implemented.
10929. (a) A health insurer shall not impose any preexisting
condition exclusions, waivered conditions, or postenrollment waiting
or affiliation periods on any health insurance policy issued,
amended, or renewed pursuant to this chapter, except as provided
under subdivision (b) of this section.
(b) After the requirement to guarantee issue of coverage under
Section 10928 has been in effect for nine months, a health insurer
may impose a preexisting condition exclusion of up to 12 months for
any person who fails to comply for more than 62 days with the
requirement to maintain coverage under Section 8899.50 of the
Government Code, providing, however, that the exclusion may not
exceed the length of time that the person failed to comply with the
requirements of that section. "Preexisting condition exclusion" means
a contract provision that excludes coverage for charges or expenses
incurred during a specified period following the individual's
effective date of coverage, as to a condition for which medical
advice, diagnosis, care, or treatment was recommended or received
during a specified period immediately preceding the effective date of
coverage. For purposes of this section, preexisting condition
provisions contained in individual health insurance policies may
relate only to conditions for which medical advice, diagnosis, care,
or treatment, including use of prescription drugs, was recommended or
received from a licensed health practitioner during the 12 months
immediately preceding the effective date of coverage.
10930. (a) On or before April 1, 2009, the department and the
Department of Managed Health Care shall jointly, by regulation,
develop a system to categorize all health insurance polices and
health plan contracts offered and sold to individuals pursuant to
this chapter and Article 11.6 (commencing with Section 1399.820) of
Chapter 2.2 of Division 2 of the Health and Safety Code into five
coverage choice categories. These coverage choice categories shall do
all of the following:
(1) Reflect a reasonable continuum between the coverage choice
category with the lowest level of health care benefits and the
coverage choice category with the highest level of health care
benefits.
(2) Permit reasonable benefit variation that will allow for a
diverse market within each coverage choice category.
(3) Be enforced consistently between health insurers and health
plans in the same marketplace regardless of licensure.
(4) Within each coverage choice category, include one standard
preferred provider organization (PPO), which is the health insurance
policy with the lowest benefit level in that category and for that
type of contract.
(b) All health insurers shall submit the filings required pursuant
to Section 10939 no later than October 1, 2009, for all individual
health insurance policies to be sold on or after July 1, 2010, to
comply with this chapter, and thereafter any additional health
insurance policies shall be filed pursuant to Section 10939. The
commissioner shall categorize each health insurance policy offered by
a health insurer into the appropriate coverage choice category on or
before March 31, 2010.
(c) To facilitate consumer comparison shopping, all health
insurers that offer coverage on an individual basis shall offer at
least one health insurance policy in each coverage choice category,
including offering at least one of the standard contracts developed
pursuant to paragraph (4) of subdivision (a), but a health insurer
may offer multiple products in each category.
(d) If a health insurer offers a specific type of health insurance
policy in one coverage choice category, it must offer that specific
type of health insurance policy in each coverage choice category. A
"type of health insurance policy" includes a health maintenance
organization model, a preferred provider organization model, an
exclusive provider organization model, a traditional indemnity model,
and a point of service model.
(e) Health insurers shall have flexibility in establishing
provider networks, provided that access to care standards pursuant to
Section 10133.5 are met, and provided that the provider network
offered for one health insurance policy in one coverage choice
category is offered for at least one health insurance policy in each
coverage choice category.
(f) A health insurer shall establish prices for its products that
reflect a reasonable continuum between the products offered in the
coverage choice category with the lowest level of benefits and the
products offered in the coverage choice category with the highest
level of benefits. A health plan shall not establish a standard risk
rate for a product in a coverage choice category at a lower rate than
a product offered in a lower coverage choice category.
(g) The coverage choice category with the lowest level of benefits
shall include the benefits that meet the requirements of minimum
creditable coverage as determined by the Managed Risk Medical
Insurance Board pursuant to Section 12739.50.
10931. A health insurer shall offer coverage for a Healthy Action
Incentives and Rewards Program that complies with the requirements
of Section 10123.56 in at least one health insurance policy in every
coverage choice category.
10932. When an individual submits a premium payment, based on the
quoted premium charges, and that payment is delivered or postmarked,
whichever occurs earlier, within the first 15 days of the month,
coverage under the health insurance policy shall become effective no
later than the first day of the following month. When that payment is
either delivered or postmarked after the 15th day of a month,
coverage shall become effective no later than the first day of the
second month following delivery or postmark of the payment.
10933. Except as provided in Section 10928, a health insurer is
not required to offer an individual health insurance policy and may
reject an application for an individual health insurance policy in
the case of either of the following:
(a) The individual and dependents who are to be covered by the
health insurance policy do not work or reside in a health insurer's
approved service area.
(b) (1) Within a specific service area or portion of a service
area, if a health insurer reasonably anticipates and demonstrates to
the satisfaction of the commissioner that it will not have sufficient
health care delivery resources to assure that health care services
will be available and accessible to the eligible individual and
dependents of the individual because of its obligations to existing
enrollees.
(2) A health insurer that cannot offer a health insurance policy
to individuals because it is lacking in sufficient health care
delivery resources within a service area or a portion of a service
area may not offer a health insurance policy in the area in which the
health insurer is not offering coverage to individuals until the
health insurer notifies the commissioner that it has the ability to
deliver services to new enrollees, and certifies to the commissioner
that from the date of the notice it will enroll all individuals and
groups requesting coverage in that area from the health insurer.
(c) A person who has been a resident of California for six months
or less unless one of the following applies: (1) the person is a
federally eligible defined individual as defined in Section 10785 or
Section 1399.801 of the Health and Safety Code; or (2) the person can
demonstrate a minimum of two years of prior creditable coverage at
least equivalent to the minimum creditable coverage developed by the
Managed Risk Medical Insurance Board pursuant to Section 12739.50 and
providing the person applies for coverage in California within 62
days of termination or cancellation of the prior creditable coverage.
(d) Any person who has been granted a temporary or permanent
hardship exemption from the requirement to maintain minimum
creditable coverage by the Managed Risk Medical Insurance Board
pursuant to subdivision (e) of Section 12739.50, during the time
period of the exemption, as determined by the board.
10934. (a) If an individual disenrolls from a health insurance
policy or health plan contract or if the individual's health
insurance policy or health plan contract is canceled pursuant to
Section 10936 or Section 1399.839 of the Health and Safety Code prior
to the anniversary date of the health insurance policy or health
plan contract, subsequent enrollment in an individual health
insurance policy or individual health plan contract shall be limited
to the same coverage choice category the individual was enrolled in
prior to disenrollment or cancellation.
(b) (1) An individual may change to a health insurance policy in a
different coverage choice category only on the anniversary date of
the subscriber or upon a qualifying event.
(2) In no case, however, may an individual move up more than one
coverage choice category on the anniversary date of the subscriber
unless there is also a qualifying event.
(c) An individual health insurance policy described in subdivision
(a) of Section 10925 that does not meet or exceed the minimum health
care coverage requirements of Section 12739.50 shall be deemed to be
the lowest coverage choice category for purposes of this section.
(d) On and after January 1, 2011, an individual who fails to
comply with the provisions of Chapter 15 (commencing with Section
8899.50) of Division 1 of Title 2 of the Government Code for more
than 62 days may only enroll in a health insurance policy or health
plan contract in the lowest coverage choice category. Upon the
individual's anniversary date, the individual may move to a higher
coverage choice category pursuant to subdivision (b).
(e) For purposes of this section, a qualifying event occurs upon
any of the following:
(1) Upon the death of the subscriber, on whose qualifying coverage
an individual was a dependent.
(2) Upon marriage of the subscriber or entrance by the subscriber
into a domestic partnership pursuant to Section 298.5 of the Family
Code.
(3) Upon divorce or legal separation of an individual from the
subscriber.
(4) Upon loss of dependent status by a dependent enrolled in group
health care coverage through a health care service plan or a health
insurer.
(5) Upon the birth or adoption of a child.
(6) Upon loss of minimum creditable coverage as defined by the
Managed Risk Medical Insurance Board pursuant to Section 12739.50.
10935. The commissioner may require a health insurer to
discontinue the offering of policies or acceptance of applications
from any individual upon a determination by the commissioner that the
health insurer does not have sufficient financial viability, or
organizational and administrative capacity to ensure the delivery of
health care services to its enrollees.
10936. All health insurance policies offered pursuant to this
chapter shall be renewable with respect to all individuals and
dependents at the option of the subscriber and shall not be canceled
except for the following reasons:
(a) Failure to pay any charges for coverage provided pursuant to
the contract if the subscriber has been duly notified and billed for
those charges and at least 15 days has elapsed since the date of
notification.
(b) Fraud or intentional misrepresentation of material fact under
the terms of the health insurance policy by the individual.
(c) Fraud or deception in the use of the
services or facilities of the health insurer or knowingly permitting
that fraud or deception by another.
(d) Movement of the subscriber outside the health insurer's
service area.
(e) If the health insurer ceases to provide or arrange for the
provision of health care services for new or existing individual
health insurance policies in this state, provided, however, that the
following conditions are satisfied:
(1) Notice of the decision to cease new or existing individual
health insurance policies in the state is provided to the
commissioner and to the individual at least 180 days prior to
discontinuation of that coverage.
(2) Individual health insurance policies shall not be canceled for
180 days after the date of the notice required under paragraph (1)
and for that business of a health insurer that remains in force, any
health insurer that ceases to offer for sale new individual health
insurance policies shall continue to be governed by this chapter with
respect to business conducted under this chapter.
(3) A health insurer that ceases to write new individual health
insurance policies in this state after the effective date of this
section shall be prohibited from offering for sale individual health
insurance policies in this state for a period of five years from the
date of notice to the commissioner. The commissioner may permit a
health insurer to offer and sell individual health insurance policies
in this state before the five-year time period has expired if the
commissioner determines that it is in the best interest of the state
and necessary to preserve the integrity of the health care market.
(f) If the health insurer withdraws an individual health insurance
policy from the market, provided that the health insurer notifies
all affected individuals and the commissioner at least 90 days prior
to the discontinuation of these health insurance policies, and that
the health insurer makes available to the individual all health
insurance policies with comparable benefits that it makes available
to new individual business.
(g) On or after July 1, 2010, a health insurer shall not rescind
the health insurance policy of any individual.
(h) Nothing in this article shall limit any other remedies
available at law to a health insurer.
10937. Premiums for health insurance policies offered or
delivered by health insurers on or after the effective date of this
chapter shall be subject to the following requirements:
(a) The premium for new or existing business shall be the standard
risk rate for an individual in a particular risk category.
(b) The premium rates shall be in effect for no less than 12
months from the date of the health insurance policy.
(c) When determining the premium rate for more than one covered
individual, the health insurer shall determine the rate based on the
standard risk rate for the subscriber. If more than one individual is
a subscriber, the premium rate shall be based on the age of the
youngest spouse or registered domestic partner.
(d) (1) Notwithstanding subdivision (a), for the first two years
following the implementation of this section, a health insurer may
apply a risk adjustment factor to the standard risk rate that may not
be more than 120 percent or less than 80 percent of the applicable
standard risk rate. In determining the risk adjustment factor, a
health insurer shall use the standardized form and process developed
by the Director of the Department of Managed Health Care pursuant to
subdivision (f) of Section 1399.840 of the Health and Safety Code.
(2) After the first two years following the implementation of this
section, the adjustments applicable under paragraph (1) shall not be
more than 110 percent or less than 90 percent of the standard risk
rate.
(3) Upon the renewal of any contract, the risk adjustment factor
applied to the individual's rate may not be more than 5 percentage
points different than the factor applied to that rate prior to
renewal. The same limitation shall be applied to individuals with
respect to the risk adjustment factor applicable for the purchase of
a new product where the individual's prior health insurer has
discontinued that product.
(4) After the first four years following the implementation of
this section, a health insurer shall base rates on the standard risk
rate with no risk adjustment factor.
(e) The commissioner and the Director of the Department of Managed
Health Care shall jointly establish a maximum limit on the ratio
between the standard risk rates for contracts for individuals in the
60 to 64 years of age, inclusive, category and contracts for
individuals in the 30 to 34 years of age, inclusive, category.
10938. (a) In connection with the offering for sale of any health
insurance policy to an individual, each health insurer shall make a
reasonable disclosure, as part of its solicitation and sales
materials, of all of the following:
(1) The provisions concerning the health insurer's right to change
premium rates on an annual basis and the factors other than
provision of services experience that affect changes in premium
rates.
(2) Provisions relating to the guaranteed issue and renewal of
individual health insurance policies.
(3) Provisions relating to the individual's right to obtain any
health insurance policy the individual is eligible to enroll in
pursuant to Sections 10928 and 10934.
(4) The availability, upon request, of a listing of all the
individual health insurance policies offered by the health insurer,
including the rates for each health insurance policy.
(b) Every solicitor or solicitor firm contracting with one or more
health insurers to solicit enrollments or subscriptions from
individuals shall, when providing information on health insurance
policies to an individual but making no specific recommendations on
particular health insurance policies, do both of the following:
(1) Advise the individual of the health insurer's obligation to
sell to any individual any health insurance policy it offers to
individuals and provide him or her, upon request, with the actual
rates that would be charged to that individual for a given health
insurance policy.
(2) Notify the individual that the solicitor or solicitor firm
will procure rate and benefit information for the individual on any
health insurance policy offered by a health insurer whose policy the
solicitor sells.
(c) Prior to filing an application for a particular individual
health insurance policy, the health insurer shall obtain a signed
statement from the individual acknowledging that the individual has
received the disclosures required by this section.
10939. (a) At least 20 business days prior to offering a health
insurance policy subject to this chapter, all health insurers shall
file with the commissioner a statement certifying that the health
insurer is in compliance with Sections 10920 and 10937. The certified
statement shall set forth the standard risk rate for each risk
category that will be used in setting the rates at which the contract
will be offered. Any action by the commissioner to disapprove,
suspend, or postpone the health insurer's use of a health insurance
policy shall be in writing, specifying the reasons that the health
insurance policy does not comply with the requirements of this
chapter.
(b) Prior to making any changes in the standard risk rates filed
with the commissioner pursuant to subdivision (a), the health insurer
shall file as an amendment a statement setting forth the changes and
certifying that the health insurer is in compliance with Sections
10920 and 10937. If the standard risk rate is being changed, a health
insurer may commence offering health insurance policies utilizing
the changed standard risk rate upon filing the certified statement
unless the commissioner disapproves the amendment by written notice.
(c) Periodic changes to the standard risk rate that a health
insurer proposes to implement over the course of up to 12 consecutive
months may be filed in conjunction with the certified statement
filed under subdivision (a) or (b).
(d) Each health insurer shall maintain at its principal place of
business all of the information required to be filed with the
commissioner pursuant to this chapter.
(e) This section shall become operative on July 1, 2009.
10940. (a) A health insurer shall include all of the following in
the statement filed pursuant to subdivision (a) of Section 10939:
(1) A summary explanation of the following for each health
insurance policy offered to individuals:
(A) Eligibility requirements.
(B) The full premium cost of each health insurance policy in each
risk category, as defined in subdivision (k) of Section 10920.
(C) When and under what circumstances benefits cease.
(D) Other coverage that may be available if benefits under the
described health insurance policy cease.
(E) The circumstances under which choice in the selection of
physicians and providers is permitted.
(F) Deductibles.
(G) Annual out-of-pocket maximums.
(2) A summary explanation of coverage for the following, together
with the corresponding copayments, coinsurance, and applicable
limitations for each health insurance policy offered to individuals:
(A) Professional services.
(B) Outpatient services.
(C) Preventive services.
(D) Hospitalization services.
(E) Emergency health coverage.
(F) Ambulance services.
(G) Prescription drug coverage.
(H) Durable medical equipment.
(I) Mental health and substance abuse services.
(J) Home health services.
(3) The telephone number or numbers that may be used by an
applicant to access a health insurer customer service representative
to request additional information about the health insurance policy.
(b) If any information provided pursuant to subdivision (a)
changes, the health insurer shall provide to the commissioner, on an
annual basis, an update of that information.
10941. The commissioner shall share the information provided by
health insurers pursuant to this article with the Office of the
Patient Advocate for purposes of the development, creation, and
maintenance of the comparative benefits matrix described in Section
1399.834 of the Health and Safety Code.
10943. (a) The commissioner may issue regulations that are
necessary to carry out the purposes of this chapter.
(b) Nothing in this chapter shall be construed as providing the
commissioner with rate regulation authority.
10944. Sections 10922, 10925, and 10930 shall become operative on
January 1, 2009, and Section 10939 shall become operative on July 1,
2009. All remaining sections of this chapter shall become operative
on July 1, 2010.
SEC. 43. Section 12693.43 of the Insurance Code is amended to
read:
12693.43. (a) Applicants applying to the purchasing pool shall
agree to pay family contributions, unless the applicant has a family
contribution sponsor. Family contribution amounts consist of the
following two components:
(1) The flat fees described in subdivision (b) or (d).
(2) Any amounts that are charged to the program by participating
health, dental, and vision plans selected by the applicant that
exceed the cost to the program of the highest cost family value
package in a given geographic area.
(b) In each geographic area, the board shall designate one or more
family value packages for which the required total family
contribution is:
(1) Seven dollars ($7) per child with a maximum required
contribution of fourteen dollars ($14) per month per family for
applicants with annual household incomes up to and including 150
percent of the federal poverty level.
(2) Nine dollars ($9) per child with a maximum required
contribution of twenty-seven dollars ($27) per month per family for
applicants with annual household incomes greater than 150 percent and
up to and including 200 percent of the federal poverty level and for
applicants on behalf of children described in clause (ii) of
subparagraph (A) of paragraph (6) of subdivision (a) of Section
12693.70.
(3) On and after July 1, 2005, fifteen dollars ($15) per child
with a maximum required contribution of forty-five dollars ($45) per
month per family for applicants with annual household income to which
subparagraph (B) of paragraph (6) of subdivision (a) of Section
12693.70 is applicable. Notwithstanding any other provision of law,
if an application with an effective date prior to July 1, 2005, was
based on annual household income to which subparagraph (B) of
paragraph (6) of subdivision (a) of Section 12693.70 is applicable,
then this paragraph shall be applicable to the applicant on July 1,
2005, unless subparagraph (B) of paragraph (6) of subdivision (a) of
Section 12693.70 is no longer applicable to the relevant family
income. The program shall provide prior notice to any applicant for
currently enrolled subscribers whose premium will increase on July 1,
2005, pursuant to this paragraph and, prior to the date the premium
increase takes effect, shall provide that applicant with an
opportunity to demonstrate that subparagraph (B) of paragraph (6) of
subdivision (a) of Section 12693.70 is no longer applicable to the
relevant family income. On and after July 1, 2009, this paragraph
shall only apply to individuals to which clause (i), but not clause
(ii), of subparagraph (B) of paragraph (6) of subdivision (a) of
Section 12693.70 is applicable.
(4) On and after July 1, 2009, twenty-five dollars ($25) per child
with a maximum required contribution of seventy-five dollars ($75)
per month per family for applicants with annual household income to
which clause (ii) of subparagraph (B) of paragraph (6) of subdivision
(a) of Section 12693.70 is applicable.
(c) Combinations of health, dental, and vision plans that are more
expensive to the program than the highest cost family value package
may be offered to and selected by applicants. However, the cost to
the program of those combinations that exceeds the price to the
program of the highest cost family value package shall be paid by the
applicant as part of the family contribution.
(d) The board shall provide a family contribution discount to
those applicants who select the health plan in a geographic area that
has been designated as the Community Provider Plan. The discount
shall reduce the portion of the family contribution described in
subdivision (b) to the following:
(1) A family contribution of four dollars ($4) per child with a
maximum required contribution of eight dollars ($8) per month per
family for applicants with annual household incomes up to and
including 150 percent of the federal poverty level.
(2) Six dollars ($6) per child with a maximum required
contribution of eighteen dollars ($18) per month per family for
applicants with annual household incomes greater than 150 percent and
up to and including 200 percent of the federal poverty level and for
applicants on behalf of children described in clause (ii) of
subparagraph (A) of paragraph (6) of subdivision (a) of Section
12693.70.
(3) On and after July 1, 2005, twelve dollars ($12) per child with
a maximum required contribution of thirty-six dollars ($36) per
month per family for applicants with annual household income to which
subparagraph (B) of paragraph (6) of subdivision (a) of Section
12693.70 is applicable. Notwithstanding any other provision of law,
if an application with an effective date prior to July 1, 2005, was
based on annual household income to which subparagraph (B) of
paragraph (6) of subdivision (a) of Section 12693.70 is applicable,
then this paragraph shall be applicable to the applicant on July 1,
2005, unless subparagraph (B) of paragraph (6) of subdivision (a) of
Section 12693.70 is no longer applicable to the relevant family
income. The program shall provide prior notice to any applicant for
currently enrolled subscribers whose premium will increase on July 1,
2005, pursuant to this paragraph and, prior to the date the premium
increase takes effect, shall provide that applicant with an
opportunity to demonstrate that subparagraph (B) of paragraph (6) of
subdivision (a) of Section 12693.70 is no longer applicable to the
relevant family income. On and after July 1, 2009, this paragraph
shall only apply to individuals to which clause (i) but not clause
(ii) of subparagraph (B) of paragraph (6) of subdivision (a) of
Section 12693.70 is applicable.
(4) On and after July 1, 2009, twenty-two dollars ($22) with a
maximum required contribution of sixty-six dollars ($66) per month
per family for applicants with annual household income to which
clause (ii) of subparagraph (B) of paragraph (6) of subdivision (a)
of Section 12693.70 is applicable.
(e) Applicants, but not family contribution sponsors, who pay
three months of required family contributions in advance shall
receive the fourth consecutive month of coverage with no family
contribution required.
(f) Applicants, but not family contribution sponsors, who pay the
required family contributions by an approved means of electronic fund
transfer shall receive a 25-percent discount from the required
family contributions.
(g) It is the intent of the Legislature that the family
contribution amounts described in this section comply with the
premium cost sharing limits contained in Section 2103 of Title XXI of
the Social Security Act. If the amounts described in subdivision (a)
are not approved by the federal government, the board may adjust
these amounts to the extent required to achieve approval of the state
plan.
(h) The adoption and one readoption of regulations to implement
paragraph (3) of subdivision (b) and paragraph (3) of subdivision (d)
shall be deemed to be an emergency and necessary for the immediate
preservation of public peace, health, and safety, or general welfare
for purposes of Sections 11346.1 and 11349.6 of the Government Code,
and the board is hereby exempted from the requirement that it
describe specific facts showing the need for immediate action and
from review by the Office of Administrative Law. For purposes of
subdivision (e) of Section 11346.1 of the Government Code, the
120-day period, as applicable to the effective period of an emergency
regulatory action and submission of specified materials to the
Office of Administrative law, is hereby extended to 180 days.
SEC. 44. Section 12693.56 is added to the Insurance Code, to read:
12693.56. (a) The board may provide or arrange for the provision
of an electronic personal health record for enrollees receiving
health care benefits, to the extent funds are appropriated for this
purpose. The record shall be provided for the purpose of providing
enrollees with information to assist them in understanding their
coverage benefits and managing their health care.
(b) At a minimum, the personal health record shall provide access
to real-time, patient-specific information regarding eligibility for
covered benefits and cost sharing requirements. The access may be
provided through the use of an Internet-based system.
(c) In addition to the data required pursuant to subdivision (b),
the board may determine that the personal health record shall also
incorporate additional data, including, but not limited to,
laboratory results, prescription history, claims history, and
personal health information authorized or provided by the enrollee.
Inclusion of this additional data shall be at the option of the
enrollee.
(d) Systems or software that pertain to the personal health record
shall adhere to accepted national standards for interoperability,
privacy, and data exchange, or shall be certified by a nationally
recognized certification body.
(e) The personal health record shall comply with applicable state
and federal confidentiality and data security requirements.
SEC. 45. Section 12693.57 is added to the Insurance Code, to read:
12693.57. Every person administering or providing benefits under
the program shall not elicit any information from the applicant or
subscriber that is not required to carry out the provisions of law
applicable to the program.
SEC. 46. Section 12693.58 is added to the Insurance Code, to read:
12693.58. (a) All types of information, whether written or oral,
concerning an applicant, subscriber, or household member, made or
kept by any public officer or agency in connection with the
administration of any provision of this part shall be confidential,
and shall not be open to examination other than for purposes directly
connected with the administration of the Healthy Families Program or
the Medi-Cal program.
(b) Except as provided in this section and to the extent permitted
by federal law or regulation, all information about applicants,
subscribers, and household members to be safeguarded as provided for
in subdivision (a) includes, but is not limited to, names and
addresses, medical services provided, social and economic conditions
or circumstances, agency evaluation of personal information, and
medical data, including diagnosis and past history of disease or
disability.
(c) Purposes directly connected with the administration of the
Healthy Families Program encompass all activities and
responsibilities in which the Managed Risk Medical Insurance Board
and its agents, officers, trustees, employees, consultants, and
contractors are engaged to conduct program operations. Purposes
directly connected with the administration of the Medi-Cal program
encompass all activities and responsibilities in which the State
Department of Health Care Services and its agents, officers,
trustees, employees, consultants, and contractors are engaged to
conduct program operations.
(d) Nothing in this section shall be construed to prohibit the
disclosure of information about the applicant, subscriber, or
household member when the applicant, subscriber, or household member
to whom the information pertains or the parent or adult with legal
custody provides express written authorization.
(e) Nothing in this part shall prohibit the disclosure of
protected health information as provided in Section 164.512 of Title
45 of the Code of Federal Regulations.
(f) In the event of a conflict between this section and Section
14100.2 of the Welfare and Institutions Code, the latter section
shall control.
SEC. 47. Section 12693.59 is added to the Insurance Code, to read:
12693.59. Nothing in this part shall preclude the board from
soliciting voluntary participation by applicants and subscribers in
communicating with the board, or with any other party, concerning
their needs as well as the needs of others who are not adequately
covered by existing private and public health care delivery systems
or concerning means of ensuring the availability of adequate health
care services. The board shall inform applicants and subscribers that
their participation is voluntary and shall inform them of the uses
for which the information is intended.
SEC. 48. Section 12693.70 of the Insurance Code is amended to
read:
12693.70. To be eligible to participate in the program, an
applicant shall meet all of the following requirements:
(a) Be an applicant applying on behalf of an eligible child, which
means a child who is all of the following:
(1) Less than 19 years of age. An application may be made on
behalf of a child not yet born up to three months prior to the
expected date of delivery. Coverage shall begin as soon as
administratively feasible, as determined by the board, after the
board receives notification of the birth. However, no child less than
12 months of age shall be eligible for coverage until 90 days after
the enactment of the Budget Act of 1999.
(2) Not eligible for no-cost full-scope Medi-Cal or Medicare
coverage at the time of application.
(3) In compliance with Sections 12693.71 and 12693.72.
(4) A child who meets citizenship and immigration status
requirements that are applicable to persons participating in the
program established by Title XXI of the Social Security Act, except
as specified in Section 12693.76.
(5) A resident of the State of California pursuant to Section 244
of the Government Code; or, if not a resident pursuant to Section 244
of the Government Code, is physically present in California and
entered the state with a job commitment or to seek employment,
whether or not employed at the time of application to or after
acceptance in, the program.
(6) (A) In either of the following:
(i) In a family with an annual or monthly household income equal
to or less than 200 percent of the federal poverty level.
(ii) When implemented by the board, subject to subdivision (b) of
Section 12693.765 and pursuant to this section, a child under the age
of two years who was delivered by a mother enrolled in the Access
for Infants and Mothers Program as described in Part 6.3 (commencing
with Section 12695). Commencing July 1, 2007, eligibility under this
subparagraph shall not include infants during any time they are
enrolled in employer-sponsored health insurance or are subject to an
exclusion pursuant to Section 12693.71 or 12693.72, or are enrolled
in the full scope of benefits under the Medi-Cal program at no share
of cost. For purposes of this clause, any infant born to a woman
whose enrollment in the Access for Infants and Mothers Program begins
after June 30, 2004, shall be automatically enrolled in the Healthy
Families Program, except during any time on or after July 1, 2007,
that the infant is enrolled in employer-sponsored health insurance or
is subject to an exclusion pursuant to Section 12693.71 or 12693.72,
or is enrolled in the full scope of benefits under the Medi-Cal
program at no share of cost. Except as otherwise specified in this
section, this enrollment shall cover the first 12 months of the
infant's life. At the end of the 12 months, as a condition of
continued eligibility, the applicant shall provide income
information. The infant shall be disenrolled if the gross annual
household income exceeds the income eligibility standard that was in
effect in the Access for Infants and Mothers Program at the time the
infant's mother became eligible, or following the two-month period
established in Section 12693.981 if the infant is eligible for
Medi-Cal with no share of cost. At the end of the second year,
infants shall again be screened for program eligibility pursuant to
this section, with income eligibility evaluated pursuant to clause
(i), subparagraphs (B) and (C), and paragraph (2) of subdivision (a).
(B) (i) All income over 200 percent of the federal poverty level
but less than or equal to 250 percent of the federal poverty level
shall be disregarded in calculating annual or monthly household
income.
(ii) On and after
July 1, 2009, all income over 250 percent of the federal poverty
level but less than or equal to 300 percent of the federal poverty
level shall also be disregarded in calculating annual or monthly
household income.
(C) Prior to July 1, 2009, in a family with an annual or monthly
household income greater than 250 percent of the federal poverty
level, any income deduction that is applicable to a child under
Medi-Cal shall be applied in determining the annual or monthly
household income. If the income deductions reduce the annual or
monthly household income to 250 percent or less of the federal
poverty level, subparagraph (B) shall be applied.
(D) On and after July 1, 2009, in a family with an annual or
monthly household income greater than 300 percent of the federal
poverty level, any income deduction that is applicable to a child
under Medi-Cal shall be applied in determining the annual or monthly
household income. If the income deductions reduce the annual or
monthly household income to 300 percent or less of the federal
poverty level, subparagraph (B) shall be applied.
(b) The applicant shall agree to remain in the program for six
months, unless other coverage is obtained and proof of the coverage
is provided to the program.
(c) An applicant shall enroll all of the applicant's eligible
children in the program.
(d) In filing documentation to meet program eligibility
requirements, if the applicant's income documentation cannot be
provided, as defined in regulations promulgated by the board, the
applicant's signed statement as to the value or amount of income
shall be deemed to constitute verification.
(e) An applicant shall pay in full any family contributions owed
in arrears for any health, dental, or vision coverage provided by the
program within the prior 12 months.
(f) By January 2008, the board, in consultation with stakeholders,
shall implement processes by which applicants for subscribers may
certify income at the time of annual eligibility review, including
rules concerning which applicants shall be permitted to certify
income and the circumstances in which supplemental information or
documentation may be required. The board may terminate using these
processes not sooner than 90 days after providing notification to the
Chair of the Joint Legislative Budget Committee. This notification
shall articulate the specific reasons for the termination and shall
include all relevant data elements that are applicable to document
the reasons for the termination. Upon the request of the Chair of the
Joint Legislative Budget Committee, the board shall promptly provide
any additional clarifying information regarding implementation of
the processes required by this subdivision.
SEC. 49. Section 12693.73 of the Insurance Code is amended to
read:
12693.73. (a) Notwithstanding any other provision of law,
children excluded from coverage under Title XXI of the Social
Security Act are not eligible for coverage under the program, except
as specified in clause (ii) of subparagraph (A) of paragraph (6) of
subdivision (a) of Section 12693.70 and Section 12693.76.
(b) On and after July 1, 2009, children who otherwise meet
eligibility requirements for the program but for their immigration
status are eligible for the program.
SEC. 50. Section 12693.76 of the Insurance Code is amended to
read:
12693.76. (a) Notwithstanding any other provision of law, a child
who is a qualified alien as defined in Section 1641 of Title 8 of
the United States Code Annotated shall not be determined ineligible
solely on the basis of his or her date of entry into the United
States.
(b) Notwithstanding any other provision of law, subdivision (a)
may only be implemented to the extent provided in the annual Budget
Act.
(c) Notwithstanding any other provision of law, any uninsured
parent or responsible adult who is a qualified alien, as defined in
Section 1641 of Title 8 of the United States Code, shall not be
determined to be ineligible solely on the basis of his or her date of
entry into the United States.
(d) Notwithstanding any other provision of law, subdivision (c)
may only be implemented to the extent of funding provided in the
annual Budget Act.
(e) Notwithstanding any other provision of law, on and after July
1, 2009, a child who is otherwise eligible to participate in the
program shall not be determined ineligible solely on the basis of his
or her immigration status.
SEC. 51. Section 12693.766 is added to the Insurance Code, to
read:
12693.766. (a) To establish that the individual meets the
requirements under subdivision (b) of Section 12693.73 and
subdivision (e) of Section 12693.76, the parent or caretaker relative
shall sign under penalty of perjury an attestation that the
individual is not described in any of the categories enumerated on
the attestation for which federal financial participation for
full-scope services is available.
(b) In implementing this section, the board shall consult with
stakeholders, including, but not limited to, consumer advocates and
counties.
(c) Nothing in this section shall be construed to limit a child's
access to Medi-Cal or Healthy Families eligibility under existing
law.
(d) This section shall become operative July 1, 2009.
SEC. 53. Part 6.45 (commencing with Section 12699.201) is added to
Division 2 of the Insurance Code, to read:
PART 6.45. THE CALIFORNIA COOPERATIVE HEALTH INSURANCE
PURCHASING PROGRAM
CHAPTER 1. GENERAL PROVISIONS
12699.201. For the purposes of this part, the following terms
have the following meanings:
(a) "Benefit plan design" means a specific health coverage product
offered for sale and includes services covered and the levels of
copayments, deductibles, and annual out-of-pocket expenses, and may
include the professional providers who are to provide those services
and the sites where those services are to be provided. A benefit plan
design may also be an integrated system for the financing and
delivery of quality health care services that has significant
incentives for the covered individuals to use the system.
(b) "Board" means the Managed Risk Medical Insurance Board.
(c) "California Cooperative Health Insurance Purchasing Program"
or "Cal-CHIPP" means the statewide purchasing pool established
pursuant to this part and administered by the board.
(d) "Dependent" means the spouse, child, or registered domestic
partner of an individual, subject to applicable terms of the health
plan contract covering the individual.
(e) "Enrollee" means an individual who is eligible for, and
participates in, Cal-CHIPP.
(f) "Fund" means the California Health Trust Fund established
pursuant to Section 12699.212.
(g) "Cal-CHIPP Healthy Families plan" shall mean health care
coverage provided through a health care service plan or a health
insurer that provides for individuals eligible pursuant to Section
12699.211.01 of the Insurance Code, or Section 14005.301 or 14005.305
of the Welfare and Institutions Code, coverage that, at a minimum,
provides the same covered services and benefits required under the
Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2
(commencing with Section 1340) of Division 2 of the Health and Safety
Code) plus prescription drug benefits. Prescription drug benefits
shall, at minimum, provide coverage for outpatient generic
prescription drugs and brand name drugs when a prescription drug that
is prescribed has no generic equivalent or when an individual is
unable to achieve the desired therapeutic result with a generic drug.
Prescription drug coverage may be subject to utilization controls.
(h) "Participating dental plan" means either a dental insurer
holding a valid certificate of authority from the commissioner or a
specialized health care service plan, as defined by subdivision (o)
of Section 1345 of the Health and Safety Code, that contracts with
the board to provide or to sell dental coverage to enrollees.
(i) "Participating health plan" means either a private health
insurer holding a valid outstanding certificate of authority from the
commissioner or a health care service plan as defined under
subdivision (f) of Section 1345 of the Health and Safety Code that
contracts with the board to provide or to sell coverage in Cal-CHIPP
and, pursuant to its contract with the board, provides, arranges,
pays for, or reimburses the costs of health services for Cal-CHIPP
enrollees.
(j) "Participating vision care plan" means either an insurer
holding a valid certificate of authority from the commissioner that
issues vision-only coverage or a specialized health care service
plan, as defined by subdivision (o) of Section 1345 of the Health and
Safety Code, that contracts with the board to provide or to sell
vision coverage to enrollees.
CHAPTER 2. ADMINISTRATION
12699.202. (a) The board shall be responsible for establishing
Cal-CHIPP and administering this part.
(b) The board may do all of the following consistent with the
standards of this part:
(1) Determine eligibility, enrollment, and disenrollment criteria
and processes for Cal-CHIPP consistent with the eligibility standards
in Chapter 3 (commencing with Section 12699.211) and, for Cal-CHIPP
Healthy Families plan enrollees, the enrollment process developed
pursuant to Section 12699.211.04.
(2) Determine the participation requirements for enrollees.
(3) Determine the participation requirements and the standards and
selection criteria for participating health, dental, and vision care
plans, including reasonable limits on a plan's administrative costs.
(4) Determine when an enrollee's coverage commences and the extent
and scope of coverage.
(5) Determine premium schedules, collect the premiums, and
administer subsidies to eligible enrollees.
(6) Determine rates paid to participating health, dental, and
vision care plans.
(7) Provide, or make available, coverage through participating
health plans in Cal-CHIPP.
(8) Provide, or make available, coverage through participating
dental and vision care plans in Cal-CHIPP.
(9) Provide for the processing of applications and the enrollment
and disenrollment of enrollees.
(10) Determine and approve the benefit designs and cost-sharing
provisions for participating health, dental, and vision care plans.
(11) Enter into contracts.
(12) Sue and be sued.
(13) Employ necessary staff.
(14) Authorize expenditures, as necessary, from the fund to pay
program expenses that exceed enrollee contributions and to administer
Cal-CHIPP.
(15) Issue rules and regulations, as necessary.
(16) Maintain enrollment and expenditures to ensure that
expenditures do not exceed the amount of revenue available in the
fund, and if sufficient revenue is not available to pay the estimated
expenditures, the board shall institute appropriate measures to
ensure fiscal solvency. This paragraph shall not be construed to
allow the board to deny enrollment of a person who otherwise meets
the eligibility requirements of Chapter 3 (commencing with Section
12699.211) in order to ensure the fiscal solvency of the fund.
(17) Establish the criteria and procedures through which employers
direct employees' premium dollars, withheld under the terms of a
cafeteria plan pursuant to Section 4801 of the Unemployment Insurance
Code, to Cal-CHIPP to be credited against the employees' premium
obligations.
(18) Share information obtained pursuant to this part with the
Employment Development Department solely for the purpose of the
administration and enforcement of this part.
(19) Exercise all powers reasonably necessary to carry out the
powers and responsibilities expressly granted or imposed by this
part.
12699.203. In developing the benefit plan designs, the board
shall comply with all of the following:
(a) The board shall take into consideration the levels of health
care coverage provided in the state and medical economic factors as
may be deemed appropriate.
(b) The Cal-CHIPP Healthy Families plan shall meet the
requirements of the Knox-Keene Health Care Service Plan Act of 1975
(Chapter 2.2 (commencing with Section 1340) of Division 2 of the
Health and Safety Code), and shall include prescription drug
benefits, combined with enrollee cost-sharing levels that promote
prevention and health maintenance, including appropriate cost-sharing
for physician office visits, diagnostic laboratory services, and
maintenance medications to manage chronic diseases. Prescription drug
benefits shall, at minimum, provide coverage for outpatient generic
prescription drugs and brand name drugs when a prescription drug that
is prescribed has no generic equivalent or when an individual is
unable to achieve the desired therapeutic result with a generic drug.
Prescription drug coverage may be subject to utilization controls.
(c) For individuals ineligible for a Cal-CHIPP Healthy Families
plan, the board shall make available, at a minimum, one product that
offers the same benefits as the minimum health care coverage defined
in Section 12739.50 and one product each from coverage choice
categories 3 and 5, established pursuant to Section 10930 and Section
1399.832 of the Health and Safety Code. Notwithstanding Section
1399.828 of the Health and Safety Code and Section 10927, this
coverage shall be subject to the same rules as set forth in Article
11.6 (commencing with Section 1399.820) of Chapters 2.2 of Division 2
of the Health and Safety Code or as set forth in Chapter 9.6
(commencing with Section 10919) of Part 2.
(d) The board may make available, through the program, dental and
vision coverage for individuals eligible for and enrolled in other
health benefit coverage through the pool under this part, if the
board makes all of the following determinations:
(1) Making that coverage available will provide a significant
benefit for the health coverage marketplace in the state.
(2) Making that coverage available will be cost effective.
(3) The board can make that coverage available on a guarantee
issue basis without undue risk of adverse selection.
(e) In determining enrollee and dependent cost-sharing for the
Cal-CHIPP Healthy Families plan, the board shall consider whether
those costs would deter an enrollee or his or her dependents from
obtaining appropriate and timely care, including those enrollees with
a low-or-moderate family income. The board shall also consider the
impact of these costs on an enrollee's ability to afford health care
services.
(f) The board shall consult with the Insurance Commissioner, the
Director of the Department of Managed Health Care, and the Director
of Health Care Services. As a condition of eligibility for the
Cal-CHIPP Healthy Families plan, enrollees shall provide all
necessary information and documentation to meet the minimum federal
requirements necessary for federal claiming.
12699.204. (a) The board may adjust premiums at a public meeting
of the board after providing, at minimum, 60 days' public notice of
the adjustment. In making the adjustment, the board shall take into
account the costs of health care typically paid for by employers and
employees in California.
(b) The following premiums shall apply to coverage under this part
for the population eligible for coverage pursuant to Section
12699.211.01 of the Insurance Code and Sections 14005.301 and
14005.305 of the Welfare and Institutions Code.
(1) For individuals with a family income less than or equal to 150
percent of the federal poverty level, no premiums or out-of-pocket
costs shall be allowed.
(2) For individuals with a family income above 150 percent but
less than or equal to 250 percent of the federal poverty level
premiums shall not exceed 5 percent of the family income net of
applicable deductions.
(c) For health care coverage made available pursuant to this part
for enrollees ineligible for a Cal-CHIPP Healthy Families plan, the
applicable premiums shall be commensurate with the full premium cost
of the coverage choice made by the enrollee. However, enrollees
eligible for the state health care tax credit established pursuant to
Section 17052.30 of the Revenue and Taxation Code may reduce their
premiums by the value of the credit. The board shall provide an
additional contribution equal to 20 percent of the premium of a tier
1 product in the pool, at a minimum, to employees with incomes at or
above 250 percent of the federal poverty level whose employers pay
into the fund and where the individual is not enrolled in or
eligible for health expenditures that may be credited against any
required employer health care contribution . The amount of this
contribution may be applied to any product offered by the California
Cooperative Health Insurance Purchasing Program except the Cal-CHIPP
Healthy Families plan.
(d) An employer may pay all, or a portion of, the premium payment
required of its employees enrolled in Cal-CHIPP.
12699.204.1. The board shall limit enrollment in the Cal-CHIPP
Heathy Families plan to individuals who are eligible under Sections
14005.301 and 14005.305 of the Welfare and Institutions Code and to
individuals eligible under Section 12699.211.01 with a family income
greater than 100 percent of the federal poverty level.
12699.206. (a) The board shall negotiate with Medi-Cal managed
care plans to obtain affordable coverage for eligible enrollees.
Nothing in this subdivision shall limit the ability of the board to
contract with other licensed health care service plans or health
insurers holding a valid certificate of authority.
(b) The board, in consultation with the State Department of Health
Care Services, shall take all reasonable steps necessary to maximize
federal funding and support federal claiming in the administration
of the purchasing pool created pursuant to this part.
12699.206.1. (a) To provide prescription drug coverage for
Cal-CHIPP enrollees, the board may take any of the following actions:
(1) Contract directly with health care service plans or health
insurers for prescription drug coverage as a component of a health
care service plan contract or a health insurance policy.
(2) Procure products directly through the prescription drug
purchasing program established pursuant to Chapter 12 (commencing
with Section 14977) of Part 5.5 of Division 3 of Title 2 of the
Government Code.
(b) The board may engage in any of the activities described in
subdivision (a), or in any cost-effective combination of those
activities.
(c) If the board enters into a prescription drug purchasing
arrangement pursuant to paragraph (2) of subdivision (a), the board
may allow any of the following entities to participate in that
arrangement:
(1) Any state, district, county, city, municipal, or other public
agency or governmental entity.
(2) A board of trustees or plan administrator responsible for
providing or delivering health care coverage pursuant to a collective
bargaining agreement, memorandum of understanding, or other similar
agreement with a labor organization. Nothing in this section shall
modify, alter or amend the fiduciary duties of these entities under
applicable federal and state laws.
(d) Notwithstanding this section, any licensed health care service
plan shall be subject to all statutory and regulatory requirements
applicable to coverage for prescription drugs under the Knox-Keene
Health Care Service Plan Act of 1975.
12699.206.2. (a) All information, whether written or oral,
concerning an applicant to Cal-CHIPP, an enrollee in Cal-CHIPP, or a
household member of the applicant or enrollee, created or maintained
by a public officer or agency in connection with the administration
of this part shall be confidential and shall not be open to
examination other than for purposes directly connected with the
administration of this part. "Purposes directly connected with the
administration of this part" includes all activities and
responsibilities in which the board or the State Department of Health
Care Services and their agents, officers, trustees, employees,
consultants, and contractors engage to conduct program operations.
(b) Information subject to the provisions of this section
includes, but is not limited to, names and addresses, medical
services provided to an enrollee, social and economic conditions or
circumstances, agency evaluation of personal information, and medical
data, such as diagnosis and health history.
(c) Nothing in this section shall be construed to prohibit the
disclosure of information about applicants and enrollees, or their
household members, if express written authorization for the
disclosure has been provided by the person to whom the information
pertains or, if that person is a minor, authorization has been
provided by the minor's parent or other adult with legal custody of
the minor.
(d) The use and disclosure of information concerning an applicant
or enrollee in the program who is a beneficiary in the Medi-Cal
program or an applicant to the Medi-Cal program shall be strictly
limited to the circumstances described in Section 14100.2 of the
Welfare and Institutions Code.
(e) Except as provided in subdivision (d), nothing in this part
shall prohibit the disclosure of protected health information as
provided in Section 164.152 of Title 45 of the Code of Federal
Regulations.
12699.207. (a) Notwithstanding any other provision of law, the
board shall not be subject to licensure or regulation by the
Department of Insurance or the Department of Managed Health Care.
(b) Participating health, dental, and vision care plans that
contract with the board shall be regulated by either the Department
of Insurance or the Department of Managed Health Care and shall be
licensed and in good standing with their respective licensing agency.
In their application to Cal-CHIPP and upon request by the board, the
participating health, dental, and vision care plans shall provide
assurance of their licensure and standing with the appropriate
licensing agency.
12699.208. The board shall collect and disseminate, as
appropriate and to the extent possible, information on the quality of
participating health, dental, and vision care plans and each plan's
cost-effectiveness to assist enrollees in selecting a plan.
12699.208.01. Participating carriers may contract with agents or
brokers to provide marketing and servicing of health benefits
coverage offered through the program. Any commissions set and paid
pursuant to this section shall be determined by the participating
carrier and the agent or broker.
12699.208.02. (a) In addition to the duties specified in Section
12699.202, the board shall coordinate with the Franchise Tax Board in
the administration of the tax credit established by Section 17052.30
of the Revenue and Taxation Code.
(b) The board shall, on behalf of an enrollee who is a qualified
taxpayer as defined in Section 17052.30 of the Revenue and Taxation
Code, pay any premium credit advance that may be authorized to that
qualified taxpayer or to the participating health plan in which the
enrollee receives coverage for himself or herself or for his or her
dependents.
(c) A participating health plan providing coverage pursuant to
this part shall credit payments under this section against the
enrollee's premium.
(d) In administering this section the board shall:
(1) Exchange information, including the total amount of qualified
premiums paid by each taxpayer during the calendar year, total amount
of any premium credit advances paid to or on behalf of each taxpayer
during the calendar year, the specific average premium amounts by
age category for a plan from coverage choice category 3 offered
pursuant to subdivision (c) of Section 12699.203, and other necessary
or appropriate information, with the Franchise Tax Board solely for
the purpose of the administration and enforcement of Section 17052.30
of the Revenue and Taxation Code and any premium credit advance that
may be authorized.
(2) Administer any premium credit advance that may be authorized.
(3) Establish the form and manner by which a qualified taxpayer
applies for any premium credit advance that may be authorized, which
shall include the provision of the applicant's social security number
or other taxpayer identification number.
(4) Provide each qualified taxpayer an annual statement regarding
premiums paid and any premium credit advances that may be authorized
to be paid to the qualified taxpayer or to a participating plan on
behalf of the qualified taxpayer.
(e) For purposes of this section, "premium credit advance" means
any premium credit advance that may be authorized in accordance with
the intent reflected in Section 17052.31 of the Revenue and Taxation
Code.
12699.209. The board shall consult and coordinate with the State
Department of Health Care Services in seeking federal financial
support for Cal-CHIPP Healthy Families coverage provided pursuant to
this part. To the extent that the state obtains federal financial
support for that subsidized coverage, the coverage shall be subject
to the terms, conditions, and duration of any applicable state plan
amendment or waiver. To the extent required to obtain federal
financial support, the board shall apply citizenship, immigration,
and identity documentation standards required in Title XIX of the
federal Social Security Act.
12699.210. The provisions of Section 12693.54 shall apply to a
contract entered into pursuant to this part.
CHAPTER 3. ELIGIBILITY
12699.211. To be eligible to enroll in Cal-CHIPP, an individual
must be a resident of the state pursuant to Section 244 of the
Government Code or physically present in the state, having entered
the state with an employment commitment or to obtain employment,
whether or not employed at the time of application to Cal-CHIPP or
after enrollment in Cal-CHIPP. In addition, to be eligible to enroll
in Cal-CHIPP, an individual must meet one of the following
requirements:
(a) Be an employee or a dependent of an employee of an employer
who elected to pay the full contribution into the
California Health Trust Fund.
(b) Be an individual eligible for coverage pursuant to Section
14005.301 or 14005.305 of the Welfare and Institutions Code.
(c) Be an individual described in Section 12699.211.01.
(d) Be an employee or his or her dependent paying the full cost of
health care coverage through an employee tax savings plan
established pursuant to Section 4801 of the Unemployment Insurance
Code, where the employer designates Cal-CHIPP in the cafeteria plan.
(e) Be eligible for a state tax credit made available pursuant to
Section 17052.30 of the Revenue and Taxation Code.
12699.211.01. (a) Eligibility for coverage under this part shall
be available through enrollment in the Cal-CHIPP Healthy Families
plan to a population composed of individuals who meet all of the
following requirements:
(1) Is a resident of the state pursuant to Section 244 of the
Government Code or is physically present in the state, having entered
the state with an employment commitment or to obtain employment,
whether or not employed at the time of application to the program.
(2) Is a citizen or national of the United States or a qualified
alien without regard to date of entry.
(3) Is 19 years of age or older and is ineligible for Medicare
Parts A and B.
(4) Has family income, less applicable deductions, greater than
100 percent of the federal poverty level but less than or equal to
250 percent of the federal poverty level.
(5) Is ineligible for the Medi-Cal program.
(6) Is not offered employer-sponsored health care coverage or
where there is no financial contribution toward the premium
by the employer on behalf of the employee the
individual is enrolled in or eligible for health expenditures that
may be credited against any required employer health care
contribution .
(b) Implementation of this section is contingent on the
establishment of a county share of cost.
12699.211.02. (a) The following program decisions may be appealed
to the board:
(1) A decision that an individual is not qualified to participate
or continue to participate in the program.
(2) A decision that an individual is not eligible for enrollment
or continuing enrollment in the program.
(3) A decision as to the effective date of coverage.
(b) An applicant or subscriber who appeals one of the decisions
listed in subdivision (a) shall be accorded an opportunity for an
administrative hearing. The hearing shall be conducted, insofar as
practicable, pursuant to Chapter 5 (commencing with Section 11500) of
Part 1 of Division 3 of the Government Code.
(c) To the extent required by law, the board shall implement this
section consistent with applicable federal law.
12699.211.03. The board may, through regulations adopted pursuant
to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division
3 of Title 2 of the Government Code, allow individuals who enrolled
in coverage under this chapter and who would be otherwise ineligible
to continue that coverage, to be eligible for extended coverage for a
period of time established by the board, not to exceed 18 months
from the date of ineligibility, if the individual pays the entire
cost for the coverage. Coverage extension policies under this section
may not increase coverage costs for other pool participants. The
board may differentiate or delimit eligibility or conditions for such
continuation coverage, as well as the rating factors used, depending
on the basis of initial eligibility and the coverage options
available to that person.
12699.211.04. The State Department of Health Care Services, in
consultation with the board, shall convene a stakeholders group to
develop an outreach and enrollment process for the purchasing pool
program that is cost effective and coordinated with the Medi-Cal and
Healthy Families programs, in order to ensure seamless access to
coverage through these programs for eligible Californians. The
process and procedures shall be subject to implementation through
future legislative action. The involved stakeholders shall include,
but not be limited to, legislative staff, counties, consumer
organizations, labor organizations, and others as appropriate. In
developing the procedures, items to be considered shall include, but
not be limited to, simplicity and ease of enrollment, current
enrollment practices, quality, accuracy, competence, customer
service, cost-effectiveness, need for automation, problem resolution,
timeliness, and ensuring that federal requirements regarding
screening and enrollment processes and procedures are met.
Implementation of the process shall be contingent on funding being
appropriated for this purpose.
CHAPTER 4. FISCAL
12699.212. (a) The California Health Trust Fund is hereby created
in the State Treasury for the purpose of the Health Care Security
and Cost Reduction Act. Any moneys in the fund that are unexpended or
unencumbered at the end of a fiscal year, may be carried forward to
the next succeeding fiscal year.
(b) The board shall establish a prudent reserve in the fund.
(c) Notwithstanding Section 16305.7 of the Government Code, all
interest earned on the moneys that have been deposited into the fund
shall be retained in the fund.
12699.216. The board, subject to federal approval and an
appropriation therefor, shall pay the nonfederal share of cost from
the fund for individuals eligible under that federal approval.
Revenues in the fund shall be used, upon appropriation, to the extent
allowable under federal law, as state matching funds for receipt of
federal funds.
12699.217. This part shall become operative on January 1, 2009.
The board shall provide health coverage pursuant to this part on and
after July 1, 2010.
SEC. 54. Part 6.7 (commencing with Section 12739.50) is added to
Division 2 of the Insurance Code, to read:
PART 6.7. MINIMUM CREDITABLE COVERAGE
12739.50. (a) On or before March 1, 2009, the Managed Risk
Medical Insurance Board shall establish, by regulation, the
definition of minimum creditable coverage for purposes of compliance
with the requirement in Section 8899.50 of the Government Code. On or
before March 1, 2009, the board shall also establish, by regulation,
the standards for minimum creditable coverage that at a minimum
apply to the individual health insurance market. The standards set by
the board pursuant to this section shall ensure that minimum
creditable coverage at least includes coverage for physician,
hospital, and preventive services and is at a minimum inclusive of
existing coverage requirements under law.
(b) The board shall consult with the Director of the Department of
Managed Health Care and the Insurance Commissioner in developing the
standards for minimum creditable coverage.
(c) In establishing the standards for minimum creditable coverage,
including the scope of services, enrollee and dependent deductible,
copayment requirements, and coverage of services outside the
deductible, the board shall consider all of the following:
(1) The degree to which minimum creditable coverage protects
individuals subject to the requirement of Section 8899.50 of the
Government Code and health purchasers from catastrophic medical
costs.
(2) The extent to which cost sharing, including any deductible,
coinsurance, or copayment requirements, would deter an enrollee or
his or her dependents from obtaining appropriate and timely care,
including consideration of coverage for prevention services that
would not be subject to any deductible. The board shall consider the
importance of encouraging periodic health evaluations and the use of
services that have been shown to be effective in detecting
or preventing serious illness , preventing, or
managing serious illness and chronic conditions .
(3) The affordability of the minimum policy for individuals who
are subject to the requirements of Section 8899.50 of the Government
Code, taking into account deductibles, coinsurance, copayments, and
total out-of-pocket costs, and the extent to which the resulting
premium cost would prevent an individual from obtaining coverage at a
reasonable price.
(4) The extent to which and under what circumstances benefits
offered or provided by a bona fide church, sect, denomination, or
organization whose principles include healing entirely by prayer or
spiritual means may be included in or qualify as meeting the
requirement to maintain minimum creditable coverage under Section
8899.50 of the Government Code.
12739.501. (a) A person or family who has an income at or below
250 percent of the federal poverty level shall be exempt from the
requirements established in Section 8899.50 of the Government Code if
the person's or family's share of the premium for 8899.50 minimum
creditable coverage exceeds 5 percent of his or her family's income.
(b) In addition to the exemption pursuant to subdivision (a), the
board shall adopt regulations by January 1, 2010, to establish
and review affordability and hardship standards for purposes of
the requirements in Section 8899.50 of the Government Code. In
developing these standards, the board shall consider all of the
following:
(1) The availability of public coverage, subsidies, and tax
credits for low-income individuals and families.
(2) Total out-of-pocket costs associated with minimum creditable
coverage, including premiums, copays, coinsurance, and deductibles.
(3) The percentage or amount of a taxpayer's adjusted gross income
that the individual would be required to contribute toward premiums
for health care.
(4) The percentage of family income that persons insured across
all health care markets currently spend on their health care
premiums, copays, coinsurance, and deductibles.
(5) The percentage of insured persons who meet or exceed their
deductibles.
(6) The impact of the premium amount on the ability of an
individual or family to afford other necessities of life, including,
but not limited to, expenses for housing, utilities, food, clothing,
child care, transportation, education, and taxes. It is the intent of
the Legislature that an individual's contributions toward health
care coverage premiums not interfere with his or her ability to pay
for basic necessities of life.
(7) The effect of the exemption criteria on premium levels for all
health care coverage purchasers.
(8) Specific circumstances and conditions that could make it a
temporary hardship for an individual to be required to purchase
minimum creditable coverage, such as significant increases in basic
living expenses because of unexpected changes in family
circumstances, expenses or living arrangements or hardship that
results from a fire, flood, natural disaster or other unexpected
natural or human-caused event causing substantial household or
personal damage.
(c) The board shall develop a process for considering requests for
exemptions for affordability and hardship and for granting those
exemptions if the board determines that the purchase or continuation
of minimum creditable coverage would create an undue hardship on an
individual or family. The board shall consider the offering of both
temporary and continuing hardship exemptions and shall establish the
timelines and the process whereby an individual and family must
obtain coverage after the expiration of a temporary exemption and the
board shall establish an individual's rights and responsibilities
related to obtaining that coverage. Individuals who are granted an
exemption by the board shall not be subject to the requirements of
Section 8899.50 of the Government Code for the period prescribed by
the board.
(d) The board shall track and identify, to the extent feasible,
the number of individuals who are exempted from the mandate to
maintain minimum creditable coverage in Section 8899.50 of the
Government Code as a result of the exemptions developed by the board,
including the specific types and categories of those exemptions, and
report the information to the Legislature and to the Director of the
Department of Managed Health Care to be used in establishing the
reinsurance mechanisms in Section 1399.844 of the Health and Safety
Code.
12739.51. (a) On or before January 1, 2010, the Managed Risk
Medical Insurance Board shall establish and maintain an active
statewide education and awareness program to inform all California
residents of their obligation under Section 8899.50 of the Government
Code, including informing them of the options available to obtain
affordable coverage through public programs, the state purchasing
pool, and commercial coverage.
(b) The board, in consultation with the State Department of Health
Care Services, shall identify and implement methods and strategies
to establish multiple entry points and opportunities for enrollment
in public or private coverage, as appropriate, for individuals
subject to Section 8899.50 of the Government Code. The board shall
work with state and local agencies, health care providers, health
plans, employers, consumer groups, community organizations, and other
appropriate stakeholders to establish point-of-service methods to
facilitate enrollment of individuals who do not have or maintain
minimum creditable coverage as required under Section 8899.50 of the
Government Code. The board shall identify and implement in
state-administered health care programs, to the greatest extent
practicable and permissible under federal law, best practices for
streamlined eligibility and enrollment.
(c) The board shall establish methods by which individuals who
have not obtained health care coverage shall be informed of the
method available to obtain affordable coverage through public
programs, the program established pursuant to Part 6.45 (commencing
with Section 12699.201) of Division 2 of the Insurance Code, and
commercial coverage. The board shall also establish methods to ensure
that uninsured individuals obtain the minimum creditable coverage.
The board shall pay the cost of health care coverage on behalf of a
previously uninsured individual who is enrolled in minimum creditable
coverage by the board after being uninsured for at least 62 days,
and the board shall establish methods by which funds advanced for
coverage may be recouped by the state from individuals for whom
coverage is purchased. The board may enter into an agreement with the
Franchise Tax Board to use the Franchise Tax Board's civil authority
and procedures in compliance with notice and other due process
requirements imposed by law to collect funds owed to the state that
were advanced to individuals pursuant to this subdivision.
(d) To the extent possible, activities undertaken pursuant to
subdivision (c) shall be based on existing reporting processes
employed throughout the state to report on the employment and tax
status of individuals and other existing mechanisms. Relevant state
agencies shall cooperate with the board and other responsible
entities in undertaking these activities and implementing this
section.
(e) The board may enter into agreements with other agencies or
departments to perform the activities required under this section.
Prior to entering into any agreements, the board shall report to the
Legislature on the activities to be undertaken pursuant to
subdivision (c). The report shall include the method by which
individuals with and without coverage are identified, the method by
which persons are to be given notice of the availability of coverage
and the timeframe to enroll, the actions that will be taken to enroll
uninsured persons, and the actions that will be taken if persons do
not enroll in minimum creditable coverage. The board shall submit the
required report by March 15, 2010.
(f) The board shall adopt regulations, as appropriate, to
implement this section.
(g) Implementation of any of the provisions of this
section shall be contingent on the appropriation of funds for the
purposes of this section in the annual Budget Act or another statute.
SEC. 55. Section 12886 is added to the Insurance Code, to read:
12886. It shall constitute an unfair labor practice contrary to
public policy, and enforceable under Section 95 of the Labor Code,
for an employer to refer an individual employee or employee's
dependent to the program established pursuant to Part 6.45
(commencing with Section 12699.201), or to arrange for an individual
employee or employee's dependent to apply to that program, for the
purpose of separating that employee or employee's dependent from
group health coverage provided in connection with the employee's
employment. An employer who pays the premium for the employee in the
program established pursuant to Part 6.45 (commencing with Section
12699.201) shall not, on the basis of that action, be deemed to be in
violation of this section.
SEC. 56. Section 12887 is added to the Insurance Code, to read:
12887. It shall constitute an unfair labor practice contrary to
public policy and enforceable under Section 95 of the Labor Code for
an employer to change the employee-employer share-of-cost ratio based
upon the employee's wage base or job classification or to make any
modification of coverage for employees and employees' dependents in
order that the employees or employees' dependents enroll in the
program established pursuant to Part 6.45 (commencing with Section
12699.201).
SEC. 57. Section 96.8 is added to the Labor Code, to read:
96.8. (a) Notwithstanding any other provision in this chapter, an
employer may provide health coverage that includes a Healthy Action
Incentives and Rewards Program that meets the requirements of Section
1367.38 of the Health and Safety Code, or Section 10123.56 of the
Insurance Code, to the employer's employees.
(b) A Healthy Action Incentives and Rewards Program offered
pursuant to this section may include, but need not be limited to,
monetary incentives and health coverage premium cost reductions for
employees for nonsmokers and smoking cessation.
SEC. 57.1. Section 17052.30 is added to the Revenue and Taxation
Code, to read:
17052.30. (a) (1) For each taxable year beginning on or after
January 1, 2010, and before January 1, 2015, there shall be allowed
as a credit against the "net tax," as defined in Section 17039, an
amount equal to those qualified health care plan premium costs that
are in excess of 5.5 percent of a qualified taxpayer's adjusted gross
income for the taxable year.
(2) The amount of credit otherwise allowed under paragraph (1)
shall be reduced by 1 percent for every 2 percent by which the
qualified taxpayer's adjusted gross income exceeds 300 percent of the
applicable federal poverty level.
(3) No credit shall be allowed under this section to a qualified
taxpayer with adjusted gross income in excess of 400 percent of the
applicable federal poverty level.
(4) (A) In the case of any taxpayer who is not a qualified
taxpayer for the entire taxable year, the allowable credit under
paragraph (1) shall be computed by first dividing the total adjusted
gross income of the qualified taxpayer by 12, and then multiplying
that amount by the number of months during the taxable year that the
taxpayer is a qualified taxpayer.
(B) Paragraphs (2) and (3) shall apply to any taxpayer described
in subparagraph (A), without the adjustment required under
subparagraph (A).
(C) The maximum amount of credit for any month computed pursuant
to this paragraph shall not exceed the maximum monthly credit amount
prescribed in paragraph (5).
(5) (A) The maximum annual and monthly allowable credit amounts
for health care premiums shall be as follows:
Maximum Annual Credit Amount
Subscriber Subscriber Subscriber
Age Single & Spouse & Child Family
& Children
19-29 $0 $665 $629 $816 $1,500
30-34 $135 $1,457 $962 $1,410 $2,634
35-39 $441 $2,069 $1,034 $1,608 $3,093
40-44 $909 $2,600 $1,088 $1,725 $3,687
45-49 $1,071 $3,338 $1,268 $1,914 $4,263
50-54 $1,755 $4,679 $1,988 $2,607 $5,370
55-59 $2,646 $6,335 $3,104 $3,444 $6,954
60-64 $3,762 $8,090 $4,112 $4,740 $8,772
2
Children 1 3+
only child children children
<1 $0 $0 $264
1-18 $0 $0 $0
Maximum Monthly Credit Amount
Subscriber Subscriber Subscriber
Age Single & Spouse & Child Family
& Children
19-29 $0 $55 $52 $68 $125
30-34 $11 $121 $80 $118 $220
35-39 $37 $172 $86 $134 $258
40-44 $76 $217 $91 $144 $307
45-49 $89 $278 $106 $160 $355
50-54 $146 $390 $166 $217 $448
55-59 $221 $528 $259 $287 $580
60-64 $314 $674 $343 $395 $731
2
Children 1 3+
only child children children
<1 $0 $0 $22
1-18 $0 $0 $0
(B) For each taxable year beginning on or after January 1, 2010,
the Franchise Tax Board shall recompute the maximum annual and
monthly credit amounts reflected in subparagraph (A) to reflect the
change in the California Consumer Price Index, U Medical Care, from
July 1, 2007, to June 30 of the calendar year immediately preceding
the beginning of the taxable year for which the recomputation is to
be made.
(C) The Department of Industrial Relations shall transmit annually
to the Franchise Tax Board, no later than August 1 of the current
calendar year, the percentage change in the California Consumer Price
Index, U Medical Care, from July 1 of the prior calendar year to
June 30 of the current calendar year.
(D) Notwithstanding any other provision of this section or any
premium credit advance that may be authorized in accordance with the
intent reflected in Section 17052.31, the maximum allowable amount of
either of those credits shall not exceed the applicable maximum
credit amounts identified in subparagraph (A), as recomputed in
accordance with subparagraph (B).
(b) For purposes of this section:
(1) "Adjusted gross income" means adjusted gross income as
computed for purposes of Section 17072.
(2) (A) "Federal poverty level" has the same meaning as poverty
guidelines updated periodically in the Federal Register by the United
States Department of Health and Human Services pursuant to Section
9902(2) of Title 42 of the United States Code.
(B) For purposes of determining the applicable federal poverty
level, family size equals the sum of the number of individuals,
including a taxpayer, spouse, and each dependent reported on the
return for the taxable year.
(3) "MRMIB" means the Managed Risk Medical Insurance Board in its
capacity in administering the program established pursuant to Article
6.45 (commencing with Section 12699.201) of Division 2 of the
Insurance Code.
(4) "Premium for a plan from coverage choice category 3" means the
monthly average cost, as determined and updated annually by the
MRMIB, of a health care service plan contract or health insurance
policy from coverage choice category 3 of the products offered by
MRMIB pursuant to subdivision (c) of Section 12699.203 of the
Insurance Code for the applicable age category. This health care
service plan contract or health insurance policy shall be one that
covers prescription drugs, physician visits, and preventive services,
including the services to manage chronic conditions, outside of any
deductible. The MRMIB shall provide to the Franchise Tax Board
the specific premium amounts for this plan for purposes of
determining the qualified health care plan premium cost, as described
in paragraph (6) of this subdivision.
(5) "Qualified health care plan" means any health plan, other than
a Cal-CHIPP Healthy Families Plan, purchased through the MRMIB
pursuant to subdivision (c) of Section 12699.203 of the Insurance
Code that provides health care coverage to satisfy the requirements
established pursuant to Section 8899.50 of the Government Code for a
qualified taxpayer, his or her spouse, or their dependents, including
any health insurance policy or health care service plan contract.
(6) "Qualified health care plan premium costs" means amounts paid
by the qualified taxpayer during the taxable year for a qualified
health care plan that are equal to 75 percent of the lesser of either
of the following:
(A) The qualified premiums paid during the taxable year by the
qualified taxpayer.
(B) The monthly premium for a plan from coverage choice category 3
multiplied by the number of months during the taxable year that the
taxpayer is a qualified taxpayer.
(7) "Qualified premiums" means the amounts paid by a qualified
taxpayer to purchase a qualified health care plan through the MRMIB
for coverage for the period during which the taxpayer is a qualified
taxpayer. Any premium credit advance, as may be authorized in
accordance with the intent reflected in Section 17052.31, used by the
MRMIB to pay all or a portion of premiums payable of a qualified
taxpayer, shall be considered "qualified premiums."
(8) (A) "Qualified taxpayer" means any taxpayer whose adjusted
gross income for the taxable year is at least 250 percent, but not in
excess of 400 percent, of the applicable federal poverty level for
the calendar year that begins in the taxable year for which the
credit is claimed.
(B) (i) Except as provided in clause (ii), any taxpayer who is
eligible to receive coverage under a group health plan that is
offered through the taxpayer's employment or through the employment
of the taxpayer's spouse for which the employer pays any portion of
the cost or where the individual is enrolled in or eligible for
health expenditures that may be credited against any required
employer health care contribution is not a qualified taxpayer
under subparagraph (A) during any period that the taxpayer is
eligible to receive coverage as described in this subparagraph.
(ii) A taxpayer shall be considered a qualified taxpayer if the
group health plan described in clause (i) does not provide coverage
with respect to one or more dependents of the taxpayer, but only to
the extent of the qualified health care plan premium costs paid by
the taxpayer with respect to those dependents.
(C) Any taxpayer who is eligible to receive coverage under the
Cal-CHIPP Healthy Families Plan pursuant to Part 6.45 (commencing
with Section 12699.201) of Division 2 of the Insurance Code or the
Medi-Cal program established pursuant to Chapter 7 (commencing with
Section 14000) of Part 3 of Division 9 of the Welfare and
Institutions Code is not a qualified taxpayer under subparagraph (A)
during any period that the taxpayer is eligible to receive coverage
as described in this subparagraph.
(9) "Dependent" means dependent as defined
in Section 8899.50 of the Government Code.
(c) In the case of a married couple, the credit allowed by this
section shall be claimed on a joint return.
(d) In the case where the credit allowed under this section
exceeds the "net tax," the excess shall be credited against other
amounts due, if any, by the qualified taxpayer and the balance, if
any, shall, upon appropriation by the Legislature, be refunded to the
qualified taxpayer.
(e) The Franchise Tax Board, in consultation with the MRMIB, may
prescribe those regulations as may be necessary or appropriate to
carry out the purposes of this section.
(f) (1) All amounts deposited into
Appropriate amounts in the California Health Trust Fund
established pursuant to Section 12699.212 of the Insurance Code
shall, upon appropriation by the Legislature, be transferred as
follows:
(A) To the MRMIB for purposes of advancing the refundable credit
for the purchase of health care plan premiums.
(B) To the Franchise Tax Board for the purpose of recovering the
amounts expended from the Tax Relief and Refund Account for amounts
claimed as credits against tax liability and amounts in excess of tax
liability as authorized under subdivision (d).
(2) The Franchise Tax Board shall notify the MRMIB of the
aggregate amount of tax credits allowed pursuant to subdivision (a)
in each fiscal quarter.
(g) (1) No credit shall be allowed under this section for any
taxable year in the disallowance period.
(2) For purposes of this section, the "disallowance period" is
either of the following:
(A) The period of two taxable years after the most recent taxable
year for which there was a final determination that the taxpayer's
claim of credit under this section was due to fraud.
(B) The period of two taxable years after the most recent taxable
year for which there was a final determination that the taxpayer's
claim of credit under this section was due to reckless or intentional
disregard of rules and regulations, but not due to fraud.
(h) This section shall remain in effect only until December 31,
2015, and as of that date is repealed.
SEC. 57.2. Section 17052.31 is added to the Revenue and Taxation
Code, to read:
17052.31. It is the intent of the Legislature to enact
legislation to authorize the credit under Section 17052.30 to be
advanceable.
SEC. 57.3. Section 17052.32 is added to the Revenue and Taxation
Code, to read:
17052.32. It is the intent of the Legislature to enact
legislation to authorize a health care coverage credit for persons
who are between the ages of 50 and 64, inclusive, and are not
qualified taxpayers as defined in paragraph (8) of subdivision (b) of
Section 17052.30, to the extent fiscal resources are available, not
to exceed fifty million dollars ($50,000,000) annually, subject to an
appropriation.
SEC. 57.4. Section 19167 of the Revenue and Taxation Code is
amended to read:
19167. A penalty shall be imposed under this section for any of
the following:
(a) In accordance with Section 6695(a) of the Internal Revenue
Code, for failure to furnish a copy of the return to the taxpayer, as
required by Section 18625.
(b) In accordance with Section 6695(c) of the Internal Revenue
Code, for failure to furnish an identifying number, as required by
Section 18624.
(c) In accordance with Section 6695(d) of the Internal Revenue
Code, for failure to retain a copy or list, as required by Section
18625 or for failure to retain an electronic filing declaration, as
required by Section 18621.5.
(d) Failure to register as a tax preparer with the California Tax
Education Council, as required by Section 22253 of the Business and
Professions Code, unless it is shown that the failure was due to
reasonable cause and not due to willful neglect.
(1) The amount of the penalty under this subdivision for the first
failure to register is two thousand five hundred dollars ($2,500).
This penalty shall be waived if proof of registration is provided to
the Franchise Tax Board within 90 days from the date notice of the
penalty is mailed to the tax preparer.
(2) The amount of the penalty under this subdivision for a failure
to register, other than the first failure to register, is five
thousand dollars ($5,000).
(e) The Franchise Tax Board shall not impose the penalties
authorized by subdivision (d) until either one of the following has
occurred:
(1) Commencing January 1, 2006, and continuing each year
thereafter, there is an appropriation in the Franchise Tax Board's
annual budget to fund the costs associated with the penalty
authorized by subdivision (d).
(2) (A) An agreement has been executed between the California Tax
Education Council and the Franchise Tax Board that provides that an
amount equal to all first year costs associated with the penalty
authorized by subdivision (d) shall be received by the Franchise Tax
Board. For purposes of this subparagraph, first year costs include,
but are not limited to, costs associated with the development of
processes or systems changes, if necessary, and labor.
(B) An agreement has been executed between the California Tax
Education Council and the Franchise Tax Board that provides that the
annual costs incurred by the Franchise Tax Board associated with the
penalty authorized by subdivision (d) shall be reimbursed by the
California Tax Education Council to the Franchise Tax Board.
(C) Pursuant to the agreement described in subparagraph (A), the
Franchise Tax Board has received an amount equal to the first year
costs described in that subparagraph.
(f) (1) In accordance with Section 6695(g) of the Internal Revenue
Code, as modified by paragraphs (2) and (3), for failure to be
diligent in determining eligibility for the refundable credit
authorized under Section 17052.30.
(2) The amount of the penalty imposed under this subdivision shall
be one thousand dollars ($1,000) for each failure.
(3) For purposes of the penalty imposed under this subdivision,
the due diligence requirements imposed by the Secretary of the
Treasury under Section 6695(g) of the Internal Revenue Code, and any
regulations promulgated thereunder, shall be modified by the
Franchise Tax Board through instructions or notices.
SEC. 57.5. Section 19528.5 is added to the Revenue and Taxation
Code, to read:
19528.5. (a) Notwithstanding any other law, the Franchise Tax
Board may establish an agreement with the Managed Risk Medical
Insurance Board under which the MRMIB provides a report to the
Franchise Tax Board, at a time and in the manner prescribed by the
Franchise Tax Board, the following information with respect to every
individual that purchased a health care plan through the MRMIB in the
calendar year:
(1) Name.
(2) Address or addresses of record.
(3) Social security number or other taxpayer identification
number.
(4) Total amount of health care plan premiums paid in the calendar
year.
(5) Total amount of premium credit advances, as may be authorized
in accordance with the intent reflected in Section 17052.31, for
purchase of premiums in the calendar year.
(b) The reports required under this section shall be transmitted
through a secure electronic process in a form and manner as shall be
jointly determined by the MRMIB and the Franchise Tax Board.
(c) Information provided to the Franchise Tax Board by the MRMIB
shall be used only for tax administration purposes and shall be
deemed to be return information within the meaning of Section 19549.
SEC. 57.6. Section 19553.5 is added to the Revenue and Taxation
Code, to read:
19553.5. (a) Subject to the limitations of this section and
federal law, including Section 6103 of the Internal Revenue Code, the
Franchise Tax Board may provide the Managed Risk Medical Insurance
Board with information obtained from a state income tax return for
purposes of verifying income, filing status, and number of dependents
of an applicant for health care plan coverage obtained through the
MRMIB. Use of the information provided under this section shall be
limited to determining eligibility for premium credit advances, as
may be authorized in accordance with the intent reflected in Section
17052.31.
(b) Neither the MRMIB nor any officer, employee, or agent, or
former officer, employee, or agent, of the MRMIB may disclose or use
any information obtained from the Franchise Tax Board pursuant to
this section except for the purposes of administering health care
plan coverage for taxpayers.
SEC. 57.7. Section 19611 of the Revenue and Taxation Code is
amended to read:
19611. (a) The Tax Relief and Refund Account is hereby created in
the General Fund. Notwithstanding Section 13340 of the Government
Code, all moneys in the Tax Relief and Refund Account are hereby
continuously appropriated, without regard to fiscal year, to the
Franchise Tax Board for purposes of making all payments as provided
in this section.
(b) Notwithstanding any other law, all payments required to be
made to taxpayers or other persons from the Personal Income Tax Fund
shall be paid from the Tax Relief and Refund Account.
(c) The Controller shall transfer, as needed, to the Tax Relief
and Refund Account:
(1) From the unexpended balance of the annual Budget Act
appropriation for Item 9100-101-001, Schedule 80-Renter's Tax Relief,
an amount determined by the Franchise Tax Board to be equivalent to
the total amount of renters' assistance credits and refunds allowed
under Section 17053.5.
(A) If there is no unexpended balance of the appropriation, as
provided for in paragraph (1), the Controller shall transfer
sufficient moneys from the Personal Income Tax Fund to make the
renters' assistance credits and refunds until there is an unexpended
balance.
(B) Subsequent to there being no unexpended balance of the
appropriation, as provided for in paragraph (1), and there being a
transfer of moneys from the Personal Income Tax Fund to make the
renters' assistance credits and refunds, reimbursement shall be made
from the unexpended balance of the appropriation as provided for in
paragraph (1) to the Personal Income Tax Fund. However, if no such
appropriation is subsequently made, reimbursement shall be made from
the General Fund.
(2) From the disability fund, the amount transferable to the
General Fund pursuant to subdivision (a) of Section 1176.5 of the
Unemployment Insurance Code.
(3) From the Personal Income Tax Fund, such additional amounts as
determined by the Franchise Tax Board to be necessary to make the
payments required under this section.
(4) Upon appropriation by the Legislature, the following transfers
shall be made:
(A) From the unexpended balance of the California Health Trust
Fund established pursuant to Section 12699.215 of the Insurance Code,
an amount determined by the Franchise Tax Board to be equivalent to
the total amount of health care premium credits allowed under Section
17052.30.
(B) If there is no unexpended balance of the California Health
Trust Fund, as provided for in this paragraph, the Controller shall,
upon appropriation by the Legislature, transfer sufficient moneys
from the Personal Income Tax Fund for credits allowed under Section
17052.30.
(C) Subsequent to there being no unexpended balance of the
California Health Trust Fund, as provided for in this paragraph, and
there being a transfer of moneys from the Personal Income Tax Fund to
allow the health care premium credits, reimbursement shall, upon
appropriation by the Legislature, be made from the unexpended balance
of the California Health Trust Fund, as provided for in this
paragraph, to the Personal Income Tax Fund. However, if no such
appropriation is subsequently made, reimbursement shall, upon
appropriation by the Legislature, be made from the General Fund.
SEC. 58. Section 301.1 is added to the Unemployment Insurance
Code, to read:
301.1. (a) The Employment Development Department shall establish
data collection and reporting methods and requirements, compatible
with existing forms and filings that employers submit to the
department, to collect and report information related to employer
health expenditures on behalf of their employees.
(b) The Employment Development Department shall report on the data
collected pursuant to subdivision (a) to the Managed Risk Medical
Insurance Board and to the Legislature on an annual basis commencing
April 1, 2011.
(c) The Employment Development Department may adopt regulations to
implement this section as needed.
SEC. 58.5. Section 1120 is added to the Unemployment Insurance
Code, to read:
1120. Any employer who fails to establish or maintain a cafeteria
plan as required by Section 4801 shall pay a penalty of one hundred
dollars ($100) per employee for the failure to establish or maintain
a cafeteria plan without good cause, or five hundred dollars ($500)
per employee if the failure to establish or maintain a cafeteria plan
is willful.
SEC. 59. Division 1.2 (commencing with Section 4800) is added to
the Unemployment Insurance Code, to read:
DIVISION 1.2. HEALTH CARE TAX SAVINGS PLAN
4800. This division shall be known and may be cited as the Health
Care Tax Savings Plan.
4801. (a) Each employer of one or more employees in this state
shall, beginning January 1, 2010, adopt and maintain a cafeteria
plan, within the meaning of Section 125 of the Internal Revenue Code,
to allow all employees to pay premiums for health care coverage to
the extent amounts for that coverage are excludable from the gross
income of the employee under Section 106 of the Internal Revenue
Code.
(b) The establishment or maintenance of a cafeteria plan shall
neither be inconsistent with Section 125 of Title 26 of the United
States Code, nor require any employer to take any action that would
violate Section 125 of Title 26 of the United States Code.
(c) For the purposes of this division, the following definitions
apply:
(1) "Employee" means an employee as defined in Article 1.5
(commencing with Section 621) of Chapter 3 of Part 1 of Division 1.
(2) "Employer" means an employer as defined in Article 3
(commencing with Section 675) of Chapter 3 of Part 1 of Division 1,
except as described in subdivision (a) of Section 683 and in
subdivision (a) of Section 685.
(3) "Employing unit" means an "employing unit" as defined in
Section 135.
(4) "Employment" means employment as defined in Article 1
(commencing with Section 601) of Chapter 3 of Part 1 of Division 1.
"Employment" does not include services excluded under Section 632,
subdivision (c) of Section 634.5, and Sections 640, 641, 643, 644,
and 644.5.
(d) The department shall promulgate rules and regulations to
implement the provisions of this division.
SEC. 60. Section 12306.1 of the Welfare and Institutions Code is
amended to read:
12306.1. (a) When any increase in provider wages or benefits is
negotiated or agreed to by a public authority or nonprofit consortium
under Section 12301.6, then the county shall use county-only funds
to fund both the county share and the state share, including
employment taxes, of any increase in the cost of the program, unless
otherwise provided for in the annual Budget Act or appropriated by
statute. No increase in wages or benefits negotiated or agreed to
pursuant to this section shall take effect unless and until, prior to
its implementation, the department has obtained the approval of the
State Department of Health Services for the increase pursuant to a
determination that it is consistent with federal law and to ensure
federal financial participation for the services under Title XIX of
the federal Social Security Act, and unless and until all of the
following conditions have been met:
(1) Each county has provided the department with documentation of
the approval of the county board of supervisors of the proposed
public authority of nonprofit consortium rate, including wages and
related expenditures. The documentation shall be received by the
department before the department and the State Department of Health
Services may approve the increase.
(2) Each county has met department guidelines and regulatory
requirements as a condition of receiving state participation in the
rate.
(b) Any rate approved pursuant to subdivision (a) shall take
effect commencing on the first day of the month subsequent to the
month in which final approval is received from the department. The
department may grant approval on a conditional basis, subject to the
availability of funding.
(c) The state shall pay 65 percent, and each county shall pay 35
percent, of the nonfederal share of wage and benefit increases
negotiated by a public authority or nonprofit consortium pursuant to
Section 12301.6 and associated employment taxes, only in accordance
with subdivisions (d) to (f), inclusive.
(d) (1) The state shall participate as provided in subdivision (c)
in wages up to seven dollars and fifty cents ($7.50) per hour and
individual health benefits up to sixty cents ($0.60) per hour for all
public authority or nonprofit consortium providers. This paragraph
shall be operative for the 2000-01 fiscal year and each year
thereafter unless otherwise provided in paragraphs (2), (3), (4), and
(5), and without regard to when the wage and benefit increase
becomes effective.
(2) The state shall participate as provided in subdivision (c) in
a total of wages and individual health benefits up to nine dollars
and ten cents ($9.10) per hour, if wages have reached at least seven
dollars and fifty cents ($7.50) per hour. Counties shall determine,
pursuant to the collective bargaining process provided for in
subdivision (c) of Section 12301.6, what portion of the nine dollars
and ten cents ($9.10) per hour shall be used to fund wage increases
above seven dollars and fifty cents ($7.50) per hour or individual
health benefit increases, or both. This paragraph shall be operative
for the 2001-02 fiscal year and each fiscal year thereafter, unless
otherwise provided in paragraphs (3), (4), and (5).
(3) The state shall participate as provided in subdivision (c) in
a total of wages and individual health benefits up to ten dollars and
ten cents ($10.10) per hour, if wages have reached at least seven
dollars and fifty cents ($7.50) per hour. Counties shall determine,
pursuant to the collective bargaining process provided for in
subdivision (c) of Section 12301.6, what portion of the ten dollars
and ten cents ($10.10) per hour shall be used to fund wage increases
above seven dollars and fifty cents ($7.50) per hour or individual
health benefit increases, or both. This paragraph shall be operative
commencing with the next state fiscal year for which the May Revision
forecast of General Fund revenue, excluding transfers, exceeds by at
least 5 percent, the most current estimate of revenue, excluding
transfers, for the year in which paragraph (2) became operative.
(4) The state shall participate as provided in subdivision (c) in
a total of wages and individual health benefits up to eleven dollars
and ten cents ($11.10) per hour, if wages have reached at least seven
dollars and fifty cents ($7.50) per hour. Counties shall determine,
pursuant to the collective bargaining process provided for in
subdivision (c) of Section 12301.6, what portion of the eleven
dollars and ten cents ($11.10) per hour shall be used to fund wage
increases or individual health benefits, or both. This paragraph
shall be operative commencing with the next state fiscal year for
which the May Revision forecast of General Fund revenue, excluding
transfers, exceeds by at least 5 percent, the most current estimate
of revenues, excluding transfers, for the year in which paragraph (3)
became operative.
(5) (A) The state shall participate as provided in subdivision (c)
in a total cost of wages and individual health benefits up to twelve
dollars and ten cents ($12.10) per hour, if wages have reached at
least seven dollars and fifty cents ($7.50) per hour. Counties shall
determine, pursuant to the collective bargaining process provided for
in subdivision (c) of Section 12301.6, what portion of the twelve
dollars and ten cents ($12.10) per hour shall be used to fund wage
increases above seven dollars and fifty cents ($7.50) per hour or
individual health benefit increases, or both.
(B) In addition to participating in a total cost of wages and
individual health benefits up to twelve dollars and ten cents
($12.10) per hour as provided for in subparagraph (A), and in
addition to the amount up to sixty cents ($0.60) per hour provided
for in paragraph (1), the state shall participate in an additional
twenty-five cents ($0.25) per hour so long as the additional funds
under this subparagraph are used to increase funding for individual
health benefits. This subparagraph shall become inoperative when
subparagraph (C) goes into effect.
(C) In addition to participating in a total cost of wages and
individual health benefits up to twelve dollars and ten cents
($12.10) per hour as provided for in subparagraph (A), and in
addition to the amount up to sixty cents ($0.60) per hour provided
for in paragraph (1), the state shall participate in an additional
fifty cents ($0.50) per hour so long as the additional funds under
this subparagraph are used to increase funding for individual health
benefits. This subparagraph shall be operative commencing with the
next state fiscal year for which the May Revision forecast of General
Fund revenue, excluding transfers, exceeds by at least 5 percent,
the most current estimate of revenue, excluding transfers, for the
year in which subparagraph (B) became operative. This subparagraph
shall become inoperative when subparagraph (D) goes into effect.
(D) In addition to participating in a total cost of wages and
individual health benefits up to twelve dollars and ten cents
($12.10) per hour as provided for in subparagraph (A), and in
addition to the amount up to sixty cents ($0.60) per hour provided
for in paragraph (1), the state shall participate in an additional
seventy-five cents ($0.75) per hour so long as the additional funds
under this subparagraph are used to increase funding for individual
health benefits. This subparagraph shall be operative commencing with
the next state fiscal year for which the May Revision forecast of
General Fund revenue, excluding transfers, exceeds by at least 5
percent, the most current estimate of revenue, excluding transfers,
for the year in which subparagraph (C) became operative.
(e) (1) On or before May 14 immediately prior to the fiscal year
for which state participation is provided under paragraphs (2) to
(5), inclusive, of subdivision (d), the Director of Finance shall
certify to the Governor, the appropriate committees of the
Legislature, and the department that the condition for each
subdivision to become operative has been met.
(2) For purposes of certifications under paragraph (1), the
General Fund revenue forecast, excluding transfers, that is used for
the relevant fiscal year shall be calculated in a manner that is
consistent with the definition of General Fund revenues, excluding
transfers, that was used by the Department of Finance in the 2000-01
Governor's Budget revenue forecast as reflected on Schedule 8 of the
Governor's Budget.
(f) Any increase in overall state participation in wage and
benefit increases under paragraphs (2) to (5), inclusive, of
subdivision (d), shall be limited to a wage and benefit increase of
one dollar ($1) per hour with respect to any fiscal year. With
respect to actual changes in specific wages and health benefits
negotiated through the collective bargaining process, the state shall
participate in the costs, as approved in subdivision (c), up to the
maximum levels as provided under paragraphs (2) to (5), inclusive, of
subdivision (d).
(g) In any county with employee representation, the employee
representative may elect to provide health benefits through a trust
fund and the public authority or nonprofit consortium shall agree to
those terms that term .
(h) The recipient of in-home supportive services shall not be
deemed the employer for purposes of any employer fee that may be
established to finance the expansion of health care coverage to
provide coverage to all Californians. Any such employer fee
requirement shall be met in the same manner as provided in
Section 12302.2.
SEC. 61. Section 14005.30 of the Welfare and Institutions Code is
amended to read:
14005.30. (a) (1) To the extent that federal financial
participation is available, Medi-Cal benefits under this chapter
shall be provided to individuals eligible for services under Section
1396u-1 of Title 42 of the United States Code, including any options
under Section 1396u-1(b)(2)(C) made available to and exercised by the
state.
(2) The department shall exercise its option under Section 1396u-1
(b)(2)(C) of Title 42 of the United States Code to adopt less
restrictive income and resource eligibility standards and
methodologies to the extent necessary to allow all recipients of
benefits under Chapter 2 (commencing with Section 11200) to be
eligible for Medi-Cal under paragraph (1).
(3) To the extent federal financial participation is available,
the department shall exercise its option under Section 1396u-1(b)(2)
(C) of Title 42 of the United States Code authorizing the state to
disregard all changes in income or assets of a beneficiary until the
next annual redetermination under Section 14012. The department shall
implement this paragraph only if, and to the extent that the State
Child Health Insurance Program waiver described in Section 12693.755
of the Insurance Code extending Healthy Families Program eligibility
to parents and certain other adults is approved and implemented.
(b) (1) To the extent that federal financial participation is
available, the department shall exercise its option under Section
1396u-1(b)(2)(C) of Title 42 of the United States Code as necessary
to expand eligibility for Medi-Cal under subdivision (a) by
establishing the amount of countable resources individuals or
families are allowed to retain at the same amount medically needy
individuals and families are allowed to retain, except that a family
of one shall be allowed to retain countable resources in the amount
of three thousand dollars ($3,000). This paragraph shall not be
operative during implementation of paragraph (2).
(2) To the extent that federal financial participation is
available, the department shall exercise its option under Section
1396u-1(b)(2)(C) of Title 42 of the United States Code as necessary
to simplify eligibility for Medi-Cal under subdivision (a) by
exempting all resources for
applicants and recipients, commencing July 1, 2010.
(c) To the extent federal financial participation is available,
the department shall, commencing March 1, 2000, adopt an income
disregard for applicants equal to the difference between the income
standard under the program adopted pursuant to Section 1931(b) of the
federal Social Security Act (42 U.S.C. Sec. 1396u-1) and the amount
equal to 100 percent of the federal poverty level applicable to the
size of the family. A recipient shall be entitled to the same
disregard, but only to the extent it is more beneficial than, and is
substituted for, the earned income disregard available to recipients.
(d) For purposes of calculating income under this section during
any calendar year, increases in social security benefit payments
under Title II of the federal Social Security Act (42 U.S.C. Sec. 401
and following) arising from cost-of-living adjustments shall be
disregarded commencing in the month that these social security
benefit payments are increased by the cost-of-living adjustment
through the month before the month in which a change in the federal
poverty level requires the department to modify the income disregard
pursuant to subdivision (c) and in which new income limits for the
program established by this section are adopted by the department.
(e) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department shall implement, without taking regulatory action,
subdivisions (a) and (b) of this section by means of an all-county
letter or similar instruction. Thereafter, the department shall adopt
regulations in accordance with the requirements of Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code. Beginning six months after the effective date
of this section, the department shall provide a status report to the
Legislature on a semiannual basis until regulations have been
adopted.
SEC. 62. Section 14005.301 is added to the Welfare and
Institutions Code, to read:
14005.301. (a) The department shall provide benefits pursuant to
Section 14005.306 to a population composed of parents and other
caretaker relatives who meet all of the following requirements:
(1) Net family income is at or below 250 percent of the federal
poverty level.
(2) The individual is not otherwise eligible for full-scope
benefits under Section 14005.30 but would be eligible for these
benefits if family income were at or below 100 percent of the federal
poverty level.
(3) The individual is a citizen, national, or qualified alien
without regard to date of entry.
(b) The eligibility determination under this section shall not
include an asset test.
(c) The department shall implement this section by means of a
state plan amendment under Section 1902(a)(10)(A)(ii)(I) of the
federal Social Security Act (Title 42 U.S.C. Sec. 1396a(a)(10)(A)(ii)
(I)), or by any other state plan amendment or waiver, or combination
thereof, as is necessary to accomplish the intent of this section.
(d) The department shall seek federal approval to utilize the same
premiums and copayments for the population described in this section
as are applied to the population eligible for the Cal-CHIPP Healthy
Families plan established pursuant to Section 12699.204 of the
Insurance Code.
(e) To the extent necessary to implement this section and Section
14005.305, the department shall seek federal approval to waive the
deprivation requirement or to modify the definition of unemployed
parent provided in Section 14008.85.
(f) This section shall be implemented only if and to the extent
that federal approval to provide benchmark benefits in a manner
consistent with Section 14005.306 has been obtained.
(g) The income test for eligibility determinations under this
section shall be the same test used for the federal poverty level
programs, but shall not include any income disregards available under
those programs.
(h) This section shall become operative on July 1, 2010, or on the
date that the authority under Section 12739.51 is implemented,
whichever is later.
SEC. 63. Section 14005.305 is added to the Welfare and
Institutions Code, to read:
14005.305. (a) The department shall provide benefits to a
population composed of individuals who are either 19 or 20 years of
age and who meet all of the following requirements:
(1) Net family income is at or below 250 percent of the federal
poverty level.
(2) The individual is not otherwise eligible for full-scope
benefits in one of the federal poverty level programs for children,
but would be eligible for those benefits if he or she were under 19
years of age with income at or below 100 percent of the federal
poverty level.
(3) The individual is a citizen, national, or qualified alien
without regard to date of entry.
(b) The eligibility determination under this section shall not
include an asset test.
(c) The department shall implement this section by means of a
state plan amendment under Section 1902(a)(10)(A)(ii)(I) of the
federal Social Security Act (Title 42 U.S.C. Sec. 1396a(a)(10)(A)(ii)
(I)), or by any other state plan amendment or waiver, or combination
thereof, as is necessary to accomplish the intent of this section.
(d) The department shall seek federal approval to utilize the same
premiums and copayments for the population to whom this section
applies as are applied to the population established pursuant to
Section 12699.211.01 of the Insurance Code.
(e) This section shall be implemented only if, and to the extent
that federal approval has been obtained to provide benchmark benefits
for individuals made eligible under this section with net income
over 100 percent of the federal poverty level in a manner consistent
with Section 14005.306.
(f) The income methodology for eligibility determinations under
this section shall be the methodology used for the federal poverty
level programs, but shall not include any income disregards available
under those programs.
(g) This section shall become operative on July 1, 2010, or on the
date that Section 12739.51 of the Insurance Code is implemented,
whichever is later, but only to the extent federal financial
participation is available.
SEC. 64. Section 14005.306 is added to the Welfare and
Institutions Code, to read:
14005.306. (a) Subject to the limitations provided in
subdivisions (b) and (c), a Medi-Cal beneficiary with a net family
income above 100 percent of the federal poverty level whose
eligibility is based on Section 14005.301 or Section 14005.305 and
who is otherwise eligible for full-scope benefits, shall receive his
or her benefits by means of a benchmark package pursuant to Section
1937 of the federal Social Security Act. This package shall be the
Cal-CHIPP Healthy Families benefit package established for the
program established pursuant to Part 6.45 (commencing with Section
12699.201) of Division 2 of the Insurance Code.
(b) To the extent required by federal law, the categories of
beneficiaries listed in Section 1937(a)(2)(B) of the federal Social
Security Act (Title 42 U.S.C. Sec. 1396u-7(a)(2)(B)), are exempt from
mandatory enrollment in the benchmark package described in
subdivision (a).
(c) The department, with the concurrence of the Managed Risk
Medical Insurance Board, may identify groups of otherwise exempt
individuals that will be allowed a choice, at the beneficiary's
option, to participate in a benchmark package.
(d) The department, with concurrence of the Managed Risk Medical
Insurance Board, may exempt other groups or categories of
beneficiaries from the requirements provided in subdivision (a).
(e) To the extent federal approval is obtained, the appeals
process for issues relating to receipt of benefits through the
benchmark package shall be the process prescribed by the Managed Risk
Medical Insurance Board for the program established pursuant to Part
6.45 (commencing with Section 12699.201) of Division 2 of the
Insurance Code.
(f) This section shall be implemented only if and to the extent
that federal financial participation is available and all necessary
federal approvals have been obtained.
(g) The department shall accomplish the intent of this section by
means of a state plan amendment or by a waiver. If this section is
implemented in whole or in part by means of a state plan amendment,
all applicable federal requirements not otherwise waived, including,
but not limited to, requirements related to cost sharing, shall
apply.
SEC. 65. Section 14005.310 is added to the Welfare and
Institutions Code, to read:
14005.310. The department shall seek federal approval to utilize
an interval of one year in determining the cost amounts specified in
Section 12699.204 of the Insurance Code for persons receiving
benchmark benefits pursuant to Sections 14005.301 and 14005.305.
SEC. 66. Section 14005.311 is added to the Welfare and
Institutions Code, to read:
14005.311. (a) The department and the Managed Risk Medical
Insurance Board shall enter into an interagency agreement under which
the board shall have authority and responsibility for administering
benchmark benefits under Sections 14005.301 and 14005.305 and for
prescribing all rules and procedures necessary for administering
these benefits subject to the single state agency oversight
responsibilities of the department and consistent with the process
developed pursuant to Section 12699.211.04 of the Insurance Code.
(b) This section shall be implemented only to the extent that
federal financial participation is not jeopardized.
SEC. 67. Section 14005.331 is added to the Welfare and
Institutions Code, to read:
14005.331. (a) An individual under the age of 19 years who would
be eligible for full-scope Medi-Cal benefits without a share of cost,
if not for his or her immigration status, shall be eligible for
full-scope Medi-Cal services under this section.
(b) To establish that the individual meets the immigration
requirements under this section, the parent or caretaker relative
shall sign under penalty of perjury an attestation that the
individual is not described in any of the categories enumerated on
the attestation for which federal financial participation for
full-scope services is available.
(c) In implementing this section, the department shall consult
with stakeholders, including, but not limited to, consumer advocates
and counties.
(d) Nothing in this section shall be construed to limit a child's
access to Medi-Cal or Healthy Families eligibility under existing
law.
(e) Implementation of this section is contingent upon an
appropriation for the purposes of this section in the annual Budget
Act or another statute.
(f) This section shall become operative on July 1, 2009.
SEC. 68. Section 14005.333 is added to the Welfare and
Institutions Code, to read:
14005.333. (a) The department shall design and implement a
program to provide the benefits described in subdivision (d) to the
population described in subdivision (c).
(b) The department shall seek to maximize the availability of
federal funding for this section under the terms of any existing
waiver, through amendment of any existing waiver, or by means of a
new waiver, or any combination thereof.
(c) The population eligible to receive benefits under this section
shall consist of all residents 21 years of age or older who meet all
of the following requirements.
(1) Their family income is at or below 100 percent of the federal
poverty level.
(2) They are not otherwise eligible for the Medi-Cal program.
(3) They would be eligible for full-scope Medi-Cal without a share
of cost if they had a categorical linkage.
(4) They are citizens, nationals, or qualified aliens without
regard to date of entry.
(5) They are not offered employer-sponsored health care coverage
or where there is no financial contribution toward the
premium by the employer on behalf of the employee the
individual is enrolled in or eligible for health expenditures that
may be credited again st any required employer health care
contribution .
(d) Benefits available under this section shall consist of a
benefit package that is designed by the department and is equivalent
to the Cal-CHIPP Healthy Families plan coverage defined in
subdivision (g) of Section 12699.201 that is made available in the
purchasing pool established pursuant to Part 6.45 (commencing with
Section 12699.201) of Division 2 of the Insurance Code. To the extent
that specific services are excluded from the subsidized package,
these services are not required to be provided under this section to
the population described under subdivision (c). These excluded
services shall include, but are not limited to, long-term care
services, nursing home care, personal care services, in-home
supportive services, and home- and community-based or other waiver
services.
(e) In determining eligibility for benefits under this section,
the department shall use the application requirements and the income
methodology of the federal poverty level programs for pregnant women
and children, including the income deductions and exemptions
applicable under those programs, but shall not include any income
disregards available under those programs.
(f) Notwithstanding Section 14007.2 or any other provision of law,
this section creates no right or entitlement for any individual to
receive any service including any emergency service, unless that
individual has been determined to meet all of the eligibility
requirements in subdivision (c) and the documentation and
verification requirements in subdivision (g).
(g) In order for an otherwise eligible individual to be eligible
for, or to receive, any service, including, but not limited to, any
emergency service under this section, the individual shall be
required to meet all of the minimum federal requirements necessary
for federal claiming by furnishing all necessary information and
providing all necessary documentation.
(h) Except to the extent required by the terms of any applicable
federal waiver, federal Medicaid rights, including the right to
retroactive eligibility, do not apply to persons or services under
this section.
(i) Nothing in this section is intended to affect or modify the
availability of the eligibility category described in Section 14052
or the application process, documentation requirements, methodology,
or benefits available pursuant to that section.
(j) Implementation of this section is contingent on the
establishment of a county share of cost.
(k) This section shall become operative on July 1, 2010, or on the
date that the authority under Section 12739.51 of the Insurance Code
is implemented, whichever is later.
SEC. 69. Section 14011.16 of the Welfare and Institutions Code is
amended to read:
14011.16. (a) Commencing August 1, 2003, the department shall
implement a requirement for beneficiaries to file semiannual status
reports as part of the department's procedures to ensure that
beneficiaries make timely and accurate reports of any change in
circumstance that may affect their eligibility. The department shall
develop a simplified form to be used for this purpose. The department
shall explore the feasibility of using a form that allows a
beneficiary who has not had any changes to so indicate by checking a
box and signing and returning the form.
(b) Beneficiaries who have been granted continuous eligibility
under Section 14005.25 shall not be required to submit semiannual
status reports. To the extent federal financial participation is
available, all children under 19 years of age shall be exempt from
the requirement to submit semiannual status reports.
(c) Beneficiaries whose eligibility is based on a determination of
disability or on their status as aged or blind shall be exempt from
the semiannual status report requirement described in subdivision
(a). The department may exempt other groups from the semiannual
status report requirement as necessary for simplicity of
administration.
(d) When a beneficiary has completed, signed, and filed a
semiannual status report that indicated a change in circumstance,
eligibility shall be redetermined.
(e) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department shall implement this section by means of all-county
letters or similar instructions without taking regulatory action.
Thereafter, the department shall adopt regulations in accordance with
the requirements of Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code.
(f) This section shall be implemented only if and to the extent
federal financial participation is available.
(g) This section shall become inoperative upon implementation of
Section 14011.16.1 and shall remain inoperative for as long as that
section continues to be implemented.
SEC. 70. Section 14011.16.1 is added to the Welfare and
Institutions Code, to read:
14011.16.1. (a) Commencing July 1, 2010, the department shall
implement a requirement for any beneficiary who is not required to
make premium payments to file a semiannual address verification
report. The department shall develop a simplified form to be used for
this purpose so that a beneficiary who has not had a change of
address can so indicate by checking a box and returning the form.
(b) When a beneficiary who is required to complete and return the
form described in subdivision (a) fails to do so, the county shall
follow up by attempting to contact the individual using the last
known phone number or numbers. If the attempted phone contact fails
to resolve the issue by providing confirmation of the current
address, the county shall search available files to determine if an
alternate or new address has been used by the beneficiary and shall
send a form to that address that is required to be returned. In the
absence of a new or alternate address, a form shall be sent to the
last known address. If the form is not returned, or if it is returned
under circumstances indicating that the individual no longer resides
at the address last provided by the individual and no forwarding
address is provided, eligibility shall be terminated for loss of
contact.
(c) Whenever Medi-Cal eligibility is terminated based on a loss of
contact as described in this section, the entity responsible for
redeterminations of eligibility for the affected beneficiary shall
document the facts causing the eligibility termination in the
beneficiary's file. Following this written certification, a notice of
action specifying that Medi-Cal eligibility was terminated based on
loss of contact shall be sent to the beneficiary.
(d) A beneficiary whose eligibility is based on a determination of
disability or on his or her status as aged or blind shall be exempt
from the requirements of subdivision (a).
(e) Children under 19 years of age and pregnant women shall be
exempt from the requirements of this section.
(f) The department may exempt categories or groups of individuals
from the requirement to file an address verification as necessary for
simplicity of administration.
(g) This section shall be implemented only if and to the extent
that its implementation does not jeopardize federal financial
participation.
SEC. 71. Section 14074.5 is added to the Welfare and Institutions
Code, to read:
14074.5. The department shall seek to maximize the availability
of federal funding for the costs of providing Cal-CHIPP Healthy
Families coverage to non-Medi-Cal beneficiaries through the program
established pursuant to Part 6.45 (commencing with Section 12699.201)
of Division 2 of the Insurance Code.
SEC. 72. Section 14081.6 is added to the Welfare and Institutions
Code, to read:
14081.6. If Article 5.21 (commencing with Section 14167.1) or
Article 5.22 (commencing with Section 14167.31), or both, become
inoperative, hospitals shall be paid for services rendered to
Medi-Cal beneficiaries at the rates that were in effect on June 30,
2010, including the rates paid pursuant to the provisions of this
article.
SEC. 73. Section 14092.5 is added to the Welfare and Institutions
Code, to read:
14092.5. (a) (1) The director shall establish a local coverage
option program to provide Medi-Cal coverage for low-income adults
eligible pursuant to Section 14005.333. The program shall meet the
requirements of this section.
(2) For a four-year period beginning with the first month of
operation of a local coverage option program in a county under this
section, the local coverage option program shall be the exclusive
Medi-Cal coverage available for the individuals who reside in the
county and who are eligible Medi-Cal beneficiaries under Section
14005.333.
(b) Local coverage option programs shall only be implemented in
counties that operate designated public hospitals where the county
elects to operate a local coverage option program and the department
approves the county's application. Counties operating a local
coverage option shall provide coverage for those eligible individuals
described in Section 14005.333 who reside in the county.
(1) All covered services shall be provided by designated public
hospitals, their affiliated public providers, and primary care
clinics licensed under subdivision (a) of Section 1204 of the Health
and Safety Code, except with respect to those medically necessary
services that are not available or accessible through these
providers. Local coverage option programs shall contract with primary
care clinics licensed under subdivision (a) of Section 1204 of the
Health and Safety Code in the county and provide reimbursement for
covered services to the extent and as required by federal law. Each
enrollee shall be assigned a medical home at a public provider
affiliated with a public hospital or at a primary care clinic
licensed under subdivision (a) of Section 1204 of the Health and
Safety Code. Local coverage option programs shall contract with
additional providers, including safety net providers such as
disproportionate share hospitals, for services to enrollees as
necessary to comply with the Knox-Keene Health Care Service Plan Act
of 1975 (Chapter 2.2 (commencing with Section 1340) of Division 2 of
the Health and Safety Code) or other provisions of law.
(2) Counties may only provide coverage in a local coverage option
through a health care service plan licensed under the Knox-Keene
Health Care Service Plan Act of 1975. The local coverage option may
include any one of the following:
(A) Direct operation through a county-operated licensed health
care service plan.
(B) Operation through a local initiative, created pursuant to
Section 14087.31, 14087.35, or 14087.38 that is licensed as a health
care service plan.
(C) Operation through a county organized health system described
in Section 14087.51 or 14087.54 that is licensed as a health care
service plan.
(3) The department shall issue a request for applications from
applicable counties and shall approve applications based on the
criteria set forth in subdivisions (g) and (h).
(4) The department shall enter into contracts with those counties
that have had their applications approved by the department.
(5) In implementing this section, the department may enter into
contracts for the provision of essential administrative and other
services.
(6) (A) If a county elects to provide coverage through a local
initiative or county organized health system, the director shall
contract with, and make the payments required under this section to,
the designated local initiative or county organized health system in
the county.
(B) An entity receiving payment under subparagraph (A), including
a unit or subunit of county government, shall not transfer any
portion of the payments received to the county or to any other unit
of government; provided, however, that retention of those funds by
the entity receiving payments under subparagraph (A) for use in
either the current or subsequent fiscal year is allowable. Retained
funds may be commingled with county funds for cash management or
related purposes, provided that those funds are appropriately tracked
and only the depositing entity is authorized to expend them.
(c) A county may offer enrollment in its local coverage option
program to employers and individuals.
(d) In consultation with participating counties, the director
shall design a common identification card to be provided by the
county to each enrollee in a local coverage option program.
(e) Each county, local initiative, or county organized health
system that operates a local coverage option program shall be
entitled to periodic payments per individual who resides in the
county who is an eligible Medi-Cal beneficiary under Section
14005.333 and is enrolled in the local coverage option program. Rates
for those payments shall be determined by the department and shall
meet the requirements of Section 14301.1. During the first three
years of operation, the department shall offer the local coverage
option program the option of a contract provision that sets a
specified dollar threshold that, if exceeded, allows the local
coverage option program to share with the state the risk and gains of
providing coverage through a risk corridor agreement that sets
boundaries on profits or losses by the local coverage option program
above and below the specified dollar thresholds as set forth in the
contract between the department and the local coverage option
program. The risk corridor agreement shall provide that if the
profits or losses incurred by the local coverage option program
exceed an initial specified dollar threshold, the local coverage
option program and the state shall share in the profits or losses,
and that if the profits or losses incurred by the local coverage
option program exceed a final specified dollar threshold such profits
or losses shall be allocated entirely to the state. The dollar
thresholds and corridors for profits and losses shall be the same
amount.
(f) All providers that provide out of network emergency services
to local coverage option program enrollees shall accept as payment in
full payments they receive from the local coverage option program
that comply with Section 1396u-2(b)(2)(D) of Title 42 of the United
States Code regarding maximum payments for those services.
(g) In consultation with the participating counties, by January 1,
2010, the department shall contract with an independent third party
to develop a local coverage option program assessment tool to measure
the extent to which the counties are providing
quality, coordinated care to eligible
individuals. The local coverage option program assessment tool shall
be designed to evaluate the following for each local coverage option
program:
(1) Enrolled patient population.
(2) The use of medical services.
(3) Access and barriers to health care.
(4) Processes and quality of care for selected medical conditions,
as appropriate for the population enrolled in the program.
(5) Patient satisfaction.
(h) The following elements shall be evaluated using the local
coverage option program assessment tool developed under subdivision
(g):
(1) Designation of a medical home and assignment of eligible
individuals to a primary care provider within 60 days of enrollment.
For purposes of this paragraph, "medical home" means a single
provider or facility that maintains all of an individual's medical
information. The primary care provider shall be a provider from which
the enrollee can access primary and preventive care, or specialty
care as determined appropriate by a medical professional.
(2) An enrollment process that includes a patient identification
system to demonstrate enrollment into the program.
(3) A screening process for individuals who may qualify for
enrollment into the Healthy Families Program and the Access for
Infants and Mothers Program prior to enrollment into the local
coverage option program.
(4) Use of a medical record system, which may include electronic
medical records.
(5) Demonstrated progress in meeting industry-accepted quality
monitoring processes to assess the health care outcomes of
individuals with chronic conditions who are enrolled in the local
coverage option program, including HEDIS and NCQA standards.
(6) Promotion of the use of preventive services and early
intervention.
(7) The ability to demonstrate how the local coverage option
program will promote the viability of the existing safety net health
care system.
(8) Demonstration of how the program will provide consumer
assistance to individuals applying to, participating in, or accessing
services in the local coverage option program. For purposes of this
paragraph, "consumer assistance" includes specific processes to
address consumer grievances and patient advocacy.
(i) After three years of operation of a local coverage option
program in a county, the department shall conduct a review using the
local coverage option program assessment tool to evaluate each county'
s performance against the benchmarks established under subdivisions
(g) and (h). If the department determines that the local coverage
option program in a particular county has substantially met the
benchmarks, the director shall extend the local coverage option
program in that county for an additional two years. If the department
concludes that a county failed to substantially meet the benchmarks,
the county's local coverage option program shall cease to be the
exclusive coverage option as provided in paragraph (2) of subdivision
(a). The county shall have the opportunity for an administrative
hearing pursuant to Section 100171 of the Health and Safety Code, and
for judicial review of the department's determination.
(j) (1) After four years of operation of a local coverage option
program in a county, if the local coverage option program in a county
substantially met the benchmarks pursuant to subdivision (i),
Medi-Cal beneficiaries enrolled in the local coverage option program
shall have the ability to disenroll from the local coverage option
program and enroll in either the county organized health system or
one of the two-plan contractors in the county.
(2) After five years of operation of a local coverage option
program in a county, newly enrolled Medi-Cal beneficiaries described
in Section 14005.333 shall have the ability to enroll in either the
local coverage option program or the county organized health system
or one of the two-plan contractors in the county, if available in the
county. If the newly eligible Medi-Cal beneficiary fails to select a
health plan within the time specified by the director, the
beneficiary shall be enrolled in the local coverage program, if
available in the county.
(k) (1) Notwithstanding the Medi-Cal managed care program
requirements of Chapters 4 and 4.1 of Title 22 of the California Code
of Regulations, the director may authorize local coverage option
programs to offer a limited network of providers pursuant to this
section.
(2) Notwithstanding the requirements of Chapter 2.2 (commencing
with Section 1340) of Division 2 of the Health and Safety Code, and
if consistent with the authority and requirements of subdivision (a)
of Section 1344 of the Health and Safety Code, the Director of
Managed Health Care may authorize local coverage option programs to
offer a limited network of providers pursuant to this section.
(3) In implementing this subdivision, the directors shall find the
action to be in the public interest and not detrimental to the
protection of patients.
(l) The local coverage option program shall become operational for
services rendered on and after July 1, 2010.
(m) The department shall seek any federal waivers or obtain
approval from the Centers for Medicare and Medicaid Services of a
state plan amendment as necessary to allow for federal financial
participation under this section. This section shall only be
implemented if and to the extent that federal financial participation
is available.
(n) Implementation of this section is contingent on establishment
of a county share of cost.
SEC. 74. Section 14132.105 is added to the Welfare and
Institutions Code, to read:
14132.105. (a) (1) The department shall establish a Healthy
Action Incentives and Rewards Program to be provided as a covered
benefit under the Medi-Cal program.
(2) The benefits described in this section shall only be provided
under the terms and conditions determined by the department, and
shall meet all the requirements described in subdivision (b).
(b) For purposes of this section, the Healthy Action Incentives
and Rewards Program shall include, but need not be limited to, all of
the following:
(1) Health risk appraisals that collect information from eligible
beneficiaries to assess overall health status and identify risk
factors, including, but not limited to, smoking and smokeless tobacco
use, alcohol abuse, drug use, nutrition, and physical activity
practices.
(2) A followup appointment with a licensed health care
professional acting within his or her scope of practice to review the
results of the health risk appraisal and discuss any recommended
actions.
(3) Incentives or rewards or both for eligible beneficiaries to
become more engaged in their health care and to make appropriate
choices that support good health, including obtaining health risk
appraisals, screening services, immunizations, or participating in
health lifestyle programs or practices. These programs or practices
may include, but need not be limited to, smoking cessation, physical
activity, or nutrition. Incentives may include, but need not be
limited to, nonmedical pharmacy products or services not otherwise
covered under this chapter, gym memberships, and weight management
programs.
(c) The department shall seek and obtain federal financial
participation and secure all federal approvals, including all
required state plan amendments or waivers, necessary to implement and
fund the services authorized under this section.
(d) This section shall be implemented only if and to the extent
that federal financial participation is available and has been
obtained.
SEC. 75. Section 14137.10 is added to the Welfare and Institutions
Code, to read:
14137.10. (a) (1) There is hereby established in the department
the Comprehensive Diabetes Services Program to provide comprehensive
diabetes prevention and management services to any individual who
meets the requirements set forth in paragraph (2). For purposes of
this subdivision, "comprehensive diabetes prevention and management
services" shall be defined by the department based on consultation
pursuant to subdivision (b). Services may include, but need not be
limited to, all of the following:
(A) Screening for diabetes and prediabetes in accordance with the
operational screening guidelines and protocols developed for the
Comprehensive Diabetes Services Program utilizing the most current
American Diabetes Association criteria for diabetes in adults.
(B) Providing visits by certified practitioners in accordance with
the operational protocols developed for the Comprehensive Diabetes
Service Program for eligible beneficiaries who have been diagnosed
with prediabetes.
(C) Providing culturally and linguistically appropriate lifestyle
coaching and self-management training for eligible adult
beneficiaries with prediabetes and diabetes, in accordance with
evidence-based interventions, to avoid unhealthy blood sugar levels
that contribute to the progression of diabetes and its complications.
(D) Conducting regular and timely laboratory evaluations, by the
primary care physician of the eligible beneficiary, in conjunction
with a program of blood sugar level self-management education and
training for eligible adult beneficiaries who have been diagnosed
with prediabetes and diabetes.
(2) A beneficiary is eligible for services pursuant to this
section if he or she is all of the following:
(A) Between 18 and 64 years of age.
(B) Not dually enrolled in the Medi-Cal program and the federal
Medicare program.
(C) Diagnosed with prediabetes or diabetes.
(D) Otherwise eligible for full scope of benefits under this
chapter but not enrolled in a Medi-Cal managed care plan.
(b) The department shall seek and obtain federal financial
participation and secure all federal approvals, including all
required state plan amendments or waivers, necessary to implement and
fund the services authorized under this section.
(c) For the purposes of implementation of this section, the
director may enter into contracts for the purposes of providing the
benefits offered under the Comprehensive Diabetes Services Program.
(d) This section shall be implemented only if and to the extent
that federal financial participation is available and has been
obtained.
(e) The Comprehensive Diabetes Services Program shall be developed
and implemented only to the extent that state funds are appropriated
annually for the services provided under this section.
(f) The department shall develop and implement incentives for
Medi-Cal fee-for-service eligible beneficiaries who participate in
the Comprehensive Diabetes Services Program and are compliant with
program requirements for screening and self-management activities.
(g) The department shall develop and implement financial
incentives for Medi-Cal fee-for-service providers who participate in
the Comprehensive Diabetes Services Program and are compliant with
program requirements in the screening and management of eligible
beneficiaries who have been diagnosed with prediabetes and diabetes.
(h) The department shall collect data including, but not be
limited to, laboratory values from screening and diagnostic tests for
the individual beneficiaries participating in the Comprehensive
Diabetes Services Program and monitor the health outcomes of the
participating individual beneficiaries.
(i) The department shall, in consultation with the California
Diabetes Program in the State Department of Public Health, contract
with an independent organization to:
(1) Evaluate and report the health outcomes and cost savings of
the Comprehensive Diabetes Services program.
(2) Estimate the short- and long-term cost savings of expanding
the strategies of the Comprehensive Diabetes Services Program
statewide through the private or commercial insurance markets.
SEC. 76. Article 5.21 (commencing with Section 14167.1) is added
to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions
Code, to read:
Article 5.21. Medi-Cal Hospital Rate Stabilization Act
14167.1. For purposes of this article, the following definitions
shall apply:
(a) "Acute inpatient day" means a fee-for-service day, as defined
for purposes of the Office of Statewide Health Planning and
Development reporting by hospitals, for which the hospital has been
paid by the Medi-Cal program where the Medi-Cal program is the
primary payer.
(b) "Base period" means the 12-month period ending on the base
period ending date. However, in the case of a hospital that
terminates a contract for the provision of hospital inpatient
services negotiated with the California Medical Assistance Commission
after the date this article is enacted and prior to the base period
ending date, the base period shall be the 12-calendar months prior to
the contract termination date.
(c) "Base period ending date" means the last day of the sixth
month immediately preceding the implementation date.
(d) "Contract hospital" means a hospital that has a written
contract with a managed health care plan to provide hospital services
to the plan's subscribers or enrollees.
(e) "Designated public hospital" means any one of the following
hospitals:
(1) UC Davis Medical Center.
(2) UC Irvine Medical Center.
(3) UC San Diego Medical Center.
(4) UC San Francisco Medical Center.
(5) UC Los Angeles Medical Center, including Santa Monica/UCLA
Medical Center.
(6) LA County Harbor/UCLA Medical Center.
(7) LA County Olive View UCLA Medical Center.
(8) LA County Rancho Los Amigos National Rehabilitation Center.
(9) LA County University of Southern California Medical Center.
(10) Alameda County Medical Center.
(11) Arrowhead Regional Medical Center.
(12) Contra Costa Regional Medical Center.
(13) Kern Medical Center.
(14) Natividad Medical Center.
(15) Riverside County Regional Medical Center.
(16) San Francisco General Hospital.
(17) San Joaquin General Hospital.
(18) San Mateo Medical Center.
(19) Santa Clara Valley Medical Center.
(20) Ventura County Medical Center.
(f) "Hospital community" means the California Hospital Association
and any other hospital industry organization or system that
represents children's hospitals, nondesignated public hospitals,
designated public hospitals, private safety net hospitals, and other
public or private hospitals.
(g) "Hospital inpatient services" means all services covered under
the Medi-Cal program and furnished by hospitals to patients who are
admitted as hospital inpatients and reimbursed on a fee-for-service
basis by the department directly or through its fiscal intermediary.
Hospital inpatient services include outpatient services furnished by
a hospital to a patient who is admitted to that hospital within 24
hours of the provision of the outpatient services that are related to
the condition for which the patient is admitted. Hospital inpatient
services include physician services only if the service is furnished
to a hospital inpatient, the physician is compensated by the hospital
for the service, and the service is billed to the Medi-Cal program
by the hospital under a provider number assigned to the hospital.
Hospital inpatient services do not include inpatient mental health
services for which a county is financially responsible or services
furnished under a managed health care plan.
(h) "Hospital outpatient services" means all services covered
under the Medi-Cal program furnished by hospitals to patients who are
registered as hospital outpatients and reimbursed by the department
on a fee-for-service basis directly or through its fiscal
intermediary. Hospital outpatient services include physician services
only if the service is furnished to a hospital outpatient, the
physician is compensated by the hospital for the service, and the
service is billed to the Medi-Cal program by the hospital under a
provider number assigned to the hospital. Hospital outpatient
services do not include outpatient mental health services for which a
county is financially responsible or services furnished under a
managed health care plan.
(i) "Implementation date" means the first day on which hospitals
provide health care services to Medi-Cal beneficiaries that are
reimbursed under this article.
(j) "Inpatient base rate" means the per diem rate, or per
discharge rate if used by the department, established pursuant to
Section 14167.4.
(k) "Managed health care plan" means a health care delivery system
that manages the provision of health care and receives prepaid
capitated payments from the state in return for providing services to
Medi-Cal beneficiaries. Managed health care plans include, but are
not limited to, county organized health systems and entities
contracting with the department to provide services pursuant to
two-plan models, geographic managed care, and prepaid plans. Entities
providing these services contract with the department pursuant to
Article 2.7 (commencing with Section 14087.3), Article 2.8
(commencing with Section 14087.5), or Article 2.91 (commencing with
Section 14089) of Chapter 7, or Article 1 (commencing with Section
14200) or Article 7 (commencing with Section 14490) of Chapter 8.
(l) "Market basket index" means the percentage increase used by
the Medicare Program for the purpose of determining payment rates for
acute care inpatient hospital services as described in Section 1886
(b)(3)(B)(ii) of the federal Social Security Act.
(m) "Medi-Cal fee-for-service payments" means all payments made by
the Medi-Cal program to hospitals as reimbursement for hospital
inpatient services furnished with respect to acute inpatient days,
including payments for both routine and ancillary services, and
payments described in subdivision (e) of Section 14167.4, but
excluding payments described in subdivision (f) of Section 14167.4.
(n) "New hospital" means a hospital that did not provide hospital
inpatient services to Medi-Cal beneficiaries under current or prior
ownership and has no history of Medi-Cal reimbursement.
(o) "Nondesignated public hospital" means a public hospital that
is licensed under subdivision (a) of Section 1250 of the Health and
Safety Code and is defined in paragraph (25) of subdivision (a) of
Section 14105.98, excluding designated public hospitals.
(p) "Outpatient base rates" means the Medi-Cal payment rates for
hospital outpatient services in effect on the date immediately
preceding the implementation date.
(q) "Private hospital" means a hospital licensed under subdivision
(a) of Section 1250 of the Health and Safety Code that is a
nonpublic hospital, nonpublic-converted hospital, or converted
hospital as those terms are defined in paragraphs (26) to (28),
inclusive, respectively, of subdivision (a) of Section 14105.98.
(r) "Safety net care pool" means the federal funds available to
ensure continued government support for the provision of health care
services to uninsured populations, as described in subdivision (k) of
Section 14166.1.
14167.2. (a) The department shall determine outpatient base rates
for hospital outpatient services furnished by nondesignated public
hospitals based on the payment methodology in effect on the day
immediately preceding the implementation date until the department
has developed new methods and standards for payment of hospital
outpatient services under subdivision (b). The department shall
increase the outpatient base rates by the percentage the department
determines is necessary to comply with subdivision (c) so that each
outpatient base rate is increased by the same percentage, except as
may be necessary to comply with federal Medicaid law.
(b) The department, in consultation with the hospital community,
and with input from others as deemed necessary and appropriate, shall
develop new methods and standards of payment for hospital outpatient
services. These new methods and standards shall implement
subdivision (c) and take into consideration factors such as acuity
and the cost incurred by hospitals in providing services.
(c) Medi-Cal rates for hospital outpatient services furnished by
nondesignated public hospitals during a fiscal year shall be set to
result in aggregate payments equal to the maximum permitted by
federal Medicaid law.
(d) The department shall establish rates of payment pursuant to
this section prior to the implementation date and prior to the
beginning of each state fiscal year commencing on or after the
implementation date. The department shall monitor payments during the
fiscal year and may make adjustments as may be necessary to comply
with subdivision (c).
14167.3. (a) The department shall determine outpatient base rates
for hospital outpatient services furnished by private hospitals
based on the payment methodology in effect on the day immediately
preceding the implementation date until the department has developed
new methods and standards for payment of hospital outpatient services
under subdivision (b). The department shall increase the outpatient
base rates by the percentage the department determines is necessary
to comply with subdivision (c) so that each outpatient base rate is
increased by the same percentage, except as may be necessary to
comply with federal Medicaid law.
(b) The department, in consultation with the hospital community,
and with input from others as deemed necessary and appropriate, shall
develop new methods and standards of payments for hospital
outpatient services. These new methods and standards shall implement
subdivision (c) and take into consideration factors such as acuity
and the cost incurred by hospitals in providing services.
(c) Medi-Cal rates for hospital outpatient services furnished by
private hospitals during a fiscal year shall be set to result in
aggregate payments equal to the maximum permitted by federal Medicaid
law.
(d) The department shall establish rates of payment pursuant to
this section prior to the implementation date and prior to the
beginning of each state fiscal year commencing on or after the
implementation date. The department shall monitor payments during the
fiscal year and may make adjustments as may be necessary to comply
with subdivision (c).
14167.4. (a) The department shall determine an inpatient base
rate for each private hospital and nondesignated public hospital.
(b) The inpatient base rate shall be an estimate of the hospital's
Medi-Cal fee-for-service payments per acute inpatient day, or per
acute inpatient discharge if used by the department, as of the day
immediately preceding the implementation date.
(c) Each hospital's inpatient base rate shall be determined as
follows:
(1) The department shall determine the hospital's total Medi-Cal
fee-for-service payments for services furnished during the base
period.
(2) The department shall determine the hospital's total Medi-Cal
acute inpatient days, or the number of acute inpatient discharges if
used by the department, for the base period.
(3) The department shall divide the result of paragraph (1) by the
result of paragraph (2).
(4) The department shall adjust the result of paragraph (3) by the
rate of increase in the market basket index from the midpoint of the
base period to the implementation date. The result shall be the
hospital's inpatient base rate.
(d) The department shall make available a paid claims summary for
each hospital that sets forth all of the Medi-Cal fee-for-service
payments made for services furnished during the hospital's base
period and the hospital's fee-for-service Medi-Cal acute inpatient
days for the base period, and any other data the department may
require to determine each hospital's base rate. The Medi-Cal
fee-for-service payments for hospitals reimbursed on a cost basis
shall be the hospital's interim payments. The department shall use
this data to compute the inpatient base rate.
(e) The department shall add to each hospital's Medi-Cal
fee-for-service payments set forth in the paid claims summary
prepared pursuant to subdivision (d) the supplemental payments under
Section 14166.12 or Section 14166.17 made by the department to the
hospital with respect to the state fiscal year ending during the base
period.
(f) In determining each hospital's inpatient base rate, the
department shall exclude payments made pursuant to Sections 14085.5,
14166.11, 14166.16, 14166.21, and 14166.23, payments by a managed
health care plan or one of its contractors, payments resulting from
an intergovernmental transfer, or payments made where the Medi-Cal
program is not the primary payer, such as services covered under
Medicare Part A and Part B where the individual receiving the
services is a Medi-Cal beneficiary.
(g) The department shall make available a preliminary list of each
hospital's inpatient base rate and provide each hospital with the
data used to compute its base rate no later than 90 days before the
implementation date. The department shall make available a final list
of each hospital's inpatient base rate 30 days prior to the
implementation date.
(h) A hospital's base rate shall be corrected if the hospital
demonstrates any of the following:
(1) The department made a mathematical error.
(2) The data used by the department is inaccurate based on the
data in the possession of the department or its fiscal intermediary
at the time the paid claims summary under subdivision (d) was
prepared. Payments made after the date of the preparation of the paid
claims summary under subdivision (d) shall not be a ground for
correction.
(3) The department failed to include payments described in
subdivision (e).
(4) The department included payments described in subdivision (f).
(i) The impatient base rate for a new hospital shall be the median
base rate of hospitals in the peer group to which the new hospital
is assigned by the department. The peer groups are those groupings of
hospitals described in Section 51553 of Title 22 of the California
Code of Regulations.
(j) The department shall review and issue a determination
concerning a hospital's request for a correction under subdivision
(h) within 30 days of receipt of the request. Any correction that is
made shall be applied prospectively, beginning the first day of the
first calendar quarter beginning after the date of the department's
determination. However, if the department receives a hospital's
request for a correction no later than 30 days after the department
publishes the preliminary list under subdivision (g), any correction
shall be effective as of the implementation date.
(k) The department shall develop an informal process for reviewing
and making decisions promptly concerning disputes by hospitals of
the department's action or proposed action
under this section or Section 14167.5, consistent
with the provisions of this section and Section 14167.5. The process
shall be exempt from the provisions of the Administrative Procedure
Act.
(l) Notwithstanding any other provision of law, no change to a
hospital's base rate shall be applied to payments for services
rendered prior to the effective date of the change to the base rate.
14167.5. To the extent feasible, the department shall develop a
case mix adjustment factor to apply to inpatient base rates for
private and nondesignated public hospitals. If developed, the
department shall take all of the following steps:
(a) Each private and nondesignated public hospital's inpatient
base rate shall be adjusted to reflect changes in the hospital's
Medi-Cal case mix for fee-for-service Medi-Cal inpatients as compared
to the base period.
(b) Case mix adjustments shall be applied prospectively at the
beginning of each state fiscal year beginning with the first state
fiscal year that begins no less than 12 months after the
implementation date.
(c) The department shall compute a case mix adjustment factor for
each hospital for each state fiscal year. The case mix adjustment
factor shall be the hospital's case mix index for the most recent
calendar year divided by the case mix index for the base period.
(d) The department, in consultation with the hospital community,
and with input from others as deemed necessary and appropriate, shall
develop the methodology for computing the case mix index, including
the data to be used and the sources of the data. In developing the
case mix index methodology, the department shall consider, at
minimum, the following factors:
(1) The development of a methodology that reasonably measures the
relative cost that would be expected to be incurred in treating
different types of cases.
(2) The use of an approach using diagnosis-related groups and
relative weights for those groups used by the Medicare Program under
the Medicare inpatient prospective payment system.
(3) The accuracy of applying weights used by the Medicare Program
for the purpose of measuring the Medi-Cal case mix.
(4) The available data.
(5) The comparability of the data available for the base period
and the data available for later years.
(6) The development of accurate measures of relative case mix for
pediatric patients.
(e) No later than 90 days prior to the beginning of the fiscal
period to which a case mix adjustment factor is applied, the
department shall determine each hospital's case mix adjustment
factor, advise each hospital of its case mix adjustment factor and
the case mix index factors used to compute the case mix adjustment
factor, and provide each hospital with the data used to compute the
case mix adjustment factor.
(f) A hospital's case mix adjustment factor shall be corrected if
the hospital demonstrates any of the following:
(1) The department made a mathematical error.
(2) The data used by the department is inaccurate.
(3) More accurate data is available.
(g) The department shall review and issue a determination
concerning a hospital's request for a correction under subdivision
(f) within 30 days of receipt of the request. Any correction that is
made shall be applied prospectively, beginning the first day of the
first calendar quarter beginning after the date of the department's
determination.
(h) (1) The department may make adjustments to a hospital's base
rate to take into account an event or series of events that may
significantly affect a hospital's costs of furnishing hospital
inpatient services that is not reflected in the case mix adjustment,
such as a merger or consolidation of hospitals, a substantial change
in the types of services furnished by a hospital, or a substantial
change in the acuity of the hospital's patients. An event or series
of events shall be deemed to significantly affect a hospital's costs
only if the department determines that the hospital's cost per day
has increased or decreased by 10 percent or more as a result of the
event or series of events. Events that are generally applicable to
multiple hospitals, such as a market basket increase in the costs of
goods or services purchased by hospitals, shall not be a basis for an
adjustment under this subdivision.
(2) The department shall notify the hospital in writing of any
adjustment it proposes to make under this subdivision. The notice
shall include an explanation of the department's reasons for making
the adjustment, the computation of the adjustment, and the data
relied on by the department in making the adjustment. The hospital
may dispute an adjustment within 30 days after receipt of the notice
described in this paragraph by providing written notice to the person
identified by the department in the notice. The hospital shall
include in the written notice of dispute the reasons the hospital
believes the adjustment should not be made as proposed by the
department, including all data supporting the hospital's position.
The department may not implement any adjustment under this
subdivision until it makes a final determination concerning a notice
of dispute.
(3) Any adjustment under this subdivision shall be made
prospectively beginning the first day of the calendar quarter
beginning no sooner than 60 days after the department issues a notice
to the hospital of the proposed adjustment. However, if the hospital
timely disputes the proposed adjustment, as specified in paragraph
(2), the proposed adjustment shall not be implemented until the first
day of the first calendar quarter beginning after the department
issues its decision concerning the dispute.
14167.6. (a) The department shall determine inpatient base rates
pursuant to Section 14167.4 for hospital inpatient services provided
by nondesignated public hospitals based on the payment methodologies
in effect on the day immediately preceding the implementation date
until the department has developed new methods and standards under
subdivision (b). The department shall increase each hospital's
inpatient base rate by the percentage the department determines is
necessary to comply with subdivision (c), taking into account the
additional payments made pursuant to subdivision (e), so that each
hospital's inpatient base rate is increased by the same percentage,
except as may be necessary to comply with federal Medicaid law. The
department shall pay each nondesignated public hospital for hospital
inpatient services provided prior to the implementation of new
methods and standards of payment developed pursuant to subdivision
(b) based on its inpatient base rate as increased pursuant to this
subdivision.
(b) The department, in consultation with the hospital community,
and with input from others as deemed necessary and appropriate, shall
develop new methods and standards of payments for hospital inpatient
services provided by nondesignated public hospitals. These new
methods and standards shall implement subdivision (c) and take into
consideration factors such as patient acuity, the cost incurred by
hospitals in providing services, and equitable payment for outlier
patients.
(c) Medi-Cal rates for hospital inpatient services furnished by
nondesignated public hospitals during a state fiscal year shall be
set at an amount that results in aggregate payments equal to the
maximum permitted by federal Medicaid law.
(d) The department shall establish rates of payment pursuant to
this section prior to the implementation date and prior to the
beginning of each state fiscal year beginning on or after the
implementation date. The department shall monitor payments during the
fiscal year, and may make adjustments that may be necessary to
comply with subdivision (c).
(e) The department shall develop a reimbursement methodology to
equitably compensate nondesignated public hospitals for the delivery
of Medi-Cal acute inpatient psychiatric services.
14167.7. (a) The department shall determine inpatient base rates
pursuant to Section 14167.4 for hospital inpatient services provided
by private hospitals based on the payment methodologies in effect on
the day immediately preceding the implementation date until the
department has developed new methods and standards under subdivision
(b). The department shall increase each hospital's inpatient base
rate by the percentage the department determines is necessary to
comply with subdivision (c), taking into account the additional
payments made under subdivision (f), so that each hospital's
inpatient base rate is increased by the same percentage, except as
may be necessary to comply with federal Medicaid law. The department
shall pay each private hospital for hospital impatient services
provided prior to the implementation of new methods and standards of
payment developed pursuant to subdivision (b) based on its inpatient
base rate as increased pursuant to this subdivision.
(b) The department, in consultation with the hospital community,
and with input from others as deemed necessary and appropriate, shall
develop new methods and standards of payments for hospital inpatient
services provided by private hospitals. These new methods and
standards shall implement subdivision (c) and take into consideration
factors such as patient acuity, the cost incurred by hospitals in
providing services, and equitable payment for outlier patients.
(c) Medi-Cal rates for hospital inpatient services furnished by
private hospitals during a state fiscal year shall be set to result
in aggregate payments equal to the maximum permitted by federal
Medicaid law.
(d) The department shall establish rates of payment pursuant to
this section prior to the implementation date and prior to the
beginning of each state fiscal year beginning on or after the
implementation date. The department shall monitor payments during the
fiscal year and may make such adjustments as may be necessary to
comply with subdivision (c).
(e) Subject to subdivision (c) of Section 14167.12, the department
shall establish rates of payment to major teaching institutions that
have a formal academic affiliation with a designated public hospital
or a private or public California medical school that take into
consideration the cost of medical education programs.
(f) The department shall develop a reimbursement methodology to
equitably compensate private hospitals for the delivery of Medi-Cal
acute inpatient psychiatric services.
14167.8. (a) The amount of any increased payments made under this
article to private hospitals in excess of the payments that would
have been made under the payment rates in effect on the day
immediately prior to the implementation date, including the amount of
increased payments to hospitals by managed health care plans
pursuant to Section 14167.9, shall not be included in the calculation
of the numerator or denominator of the low-income percent of the
OBRA limit for purposes of the disproportionate share hospital
replacement fund payments pursuant to Section 14166.11.
(b) The department shall continue to make payments to private and
nondesignated public hospitals pursuant to Sections 14085.5,
14105.17, 14105.97, 14166.11, and 14166.16, in addition to other
payments made under this article. The department shall take all of
these payments into account in determining whether an applicable
federal limitation is satisfied only if, and to the extent, required
by federal Medicaid law.
(c) Each private and nondesignated public hospital, as a condition
of receiving reimbursement under this section, shall keep, maintain,
and have readily retrievable, any records specified by the
department to fully support reimbursement amounts to which the
hospital is entitled, and any other records required by the federal
Centers for Medicare and Medicaid Services.
14167.9. (a) The director shall increase reimbursement rates to
managed health care plans by the actuarial equivalent amount
necessary to ensure that managed health care plans increase rates of
payments to hospitals under their contracts by the same percentage
that Medi-Cal fee-for-service rates to hospitals are increased
pursuant to this article, subject to the limitations of federal
Medicaid law, if any.
(b) Subject to subdivision (c), as applicable, the department
shall further increase payments to managed health care plans, in
addition to any increased payments made under subdivision (a), as may
be necessary to ensure that the full amount of the revenue arising
from payments of a fee from all hospitals subject to the fee for
patient days in a fiscal year is expended after making the
expenditures for the payments under Sections 14167.2, 14167.3,
14167.6, 14167.7, and 14167.10.
(c) (1) The amount of increased payments under this section shall
not exceed either of the following limits:
(A) The maximum amount, if any, for which federal financial
participation may be claimed.
(B) The sum of available revenue derived from a fee, as described
in subdivision (l) of Section 14167.12, plus interest, penalties, and
federal financial participation.
(2) The revenue derived from a fee, as described in subdivision
(l) of Section 14167.12, that is made available for purposes of this
section shall be 23.29 percent of the total fees that are assessed on
nondesignated public and private hospitals with respect to any
fiscal year.
(d) A Medi-Cal managed care plan shall equitably expend, in the
form of increased rates to all private hospitals, nondesignated
public hospitals, and designated public hospitals, for providing
services to Medi-Cal patients, 100 percent of any rate increase it
receives under this section. Managed health care plans shall submit
documentation as the department may require to demonstrate compliance
with the provisions of this subdivision.
14167.10. (a) (1) Commencing July 1, 2010, designated public
hospitals shall receive Medi-Cal reimbursement as specified in this
section.
(2) For purposes of this section, "hospital services" means
inpatient services and services rendered in the outpatient department
of the hospital, excluding services rendered by a hospital-based
federally qualified health center for which reimbursement is received
pursuant to Section 14132.100.
(b) Notwithstanding Article 2.6 (commencing with Section 14081),
Sections 14166.35 to 14166.9, inclusive, and any other provision of
law, each of the designated public hospitals shall be paid for those
hospital services provided to Medi-Cal beneficiaries on a
fee-for-service basis during any fiscal year as follows:
(1) Except as provided in paragraph (5), each of the designated
public hospitals shall receive, as payment for inpatient hospital
services provided to Medi-Cal beneficiaries during any fiscal year,
amounts based on the hospital's allowable costs incurred in providing
those services. These costs shall be determined annually by the
department making use of the data provided pursuant to subdivision
(c).
(2) Except as provided in paragraph (5), for the 2010-11 fiscal
year, and each fiscal year thereafter, each of the designated public
hospitals shall receive a reimbursement rate, limited to the payments
funded using state funds as provided in paragraph (3), for the
estimated cost of inpatient and outpatient hospital services rendered
to Medi-Cal beneficiaries based upon claims filed by the hospital in
accordance with the claims process set forth in Division 3
(commencing with Section 50000) of Title 22 of the California Code of
Regulations. Estimated costs shall be derived pursuant to the
process set forth in subdivision (b) of Section 14166.4. Costs not
reimbursed pursuant to this paragraph shall be reimbursed pursuant to
paragraph (7). Inpatient hospital rates may be on a per diem or per
discharge basis as determined by the department.
(3) (A) (i) The nonfederal share of the reimbursement specified in
paragraph (2) shall consist of state funds, which shall be
established for fiscal year 2010-11 through and including fiscal year
2012-13 at the nonfederal share of the full cost incurred by the
particular hospital in the 2009-10 fiscal year, adjusted annually by
the percentage increase in the medical component of the Consumer
Price Index-Urban for the United States, but not to exceed the
nonfederal share of allowable, actual costs. For purposes of this
paragraph, the 2009-10 fiscal year shall be the hospital's initial
base year.
(ii) Notwithstanding clause (i), the nonfederal share of
reimbursement available for the purposes of paragraph (2) shall be
reduced annually by the amount of twenty-five million dollars
($25,000,000), which amount of state funds shall be made available
for purposes of subdivision (g).
(B) For purposes of this paragraph, the nonfederal share shall be
calculated by subtracting the federal medical assistance percentage
in effect for the particular fiscal year from 100 percent.
(C) (i) For fiscal year 2013-14 and each fiscal year thereafter,
the nonfederal share of the reimbursement specified in paragraph (2),
as reduced pursuant to clause (ii) of subparagraph (A), shall
consist of state funds, which shall be established at the nonfederal
share of the full cost incurred by the particular hospital in the
hospital's base year, adjusted annually by the percentage increase in
the medical component of the Consumer Price Index-Urban for the
United States, but not to exceed the nonfederal share of allowable,
actual costs.
(ii) At the beginning of each three-year period beginning with the
three-year period commencing on July 1, 2013, each hospital's costs
incurred, for purposes of clause (i), shall be determined to be the
full cost incurred by the particular hospital in the fiscal year
beginning two years prior to the beginning of the new three-year
period, which fiscal year shall be the hospital's new base year.
(4) For the 2010-11 fiscal year, and each fiscal year thereafter,
each designated public hospital shall receive supplemental federal
reimbursement pursuant to Section 14105.96, in addition to the
reimbursement received by each hospital for outpatient services
pursuant to paragraph (2).
(5) Reimbursement paid to Federally Qualified Health Centers shall
continue pursuant to Section 14132.100 for those hospitals that were
designated by the state as Federally Qualified Health Centers as of
July 1, 2007.
(6) The cost data and the resulting estimated costs submitted
pursuant to this section shall be certified as accurate by the unit
of government that owns or operates the hospital submitting the
estimated costs. Certifications required by this paragraph shall
comply with the requirements of subdivision (e) of Section 14166.8.
(7) (A) To the extent that the amount of the estimated allowable
costs for each designated public hospital determined pursuant to
paragraph (1) exceeds the amounts actually paid pursuant to paragraph
(2), the hospital shall receive a quarterly supplemental payment
equal to the federal reimbursement received as a result of the
amounts claimed by the department to the federal government based on
the total amounts certified pursuant to paragraph (6).
(B) Services provided by clinics and hospital outpatient
departments for which reimbursement is made under a cost-based
methodology pursuant to Section 14105.24 shall continue to be
reimbursed under that methodology.
(C) The supplemental Medi-Cal reimbursement provided by this
paragraph shall be distributed quarterly under a payment methodology
based on inpatient services provided to Medi-Cal patients at the
eligible facility, either on a per-visit basis, per-procedure basis,
or any other federally permissible basis.
(D) Payments made pursuant to this paragraph shall be subject to
reconciliation pursuant to subdivision (f), and pursuant to any other
applicable requirement of state or federal law.
(c) (1) Within five months after the end of each fiscal year, each
designated public hospital shall submit to the department both of
the following reports:
(A) The hospital's Medi-Cal cost report for the fiscal year.
(B) Other cost reporting and statistical data necessary for the
determination of amounts due the hospital, as requested by the
department.
(2) For each fiscal year, the reports shall identify the costs
incurred in providing inpatient hospital services to Medi-Cal
beneficiaries on a fee-for-service basis.
(3) Reports submitted under this subdivision shall include all
allowable costs.
(d) Designated public hospitals shall receive disproportionate
share hospital payments pursuant to Section 14166.6.
(e) In the event of a conflict between the provisions of this
section and any provision of Article 5.2 (commencing with Section
14166), the provisions of this section shall govern. In addition to
direct conflicts, if continuing the implementation or application of
any of the provisions of Article 5.2 (commencing with Section 14166)
leads to results that are inconsistent with the payment methodology
established in this section, after consultation with representatives
of the designated public hospitals, the director shall not implement
or apply any provision of Article 5.2 (commencing with Section 14166)
that the director determines has those results.
(f) No later than April 1 following the end of the fiscal year,
the department shall undertake an interim reconciliation of payments
made pursuant to this section based on the hospitals' Medi-Cal cost
reports and other cost and statistical data submitted by the
hospitals for the fiscal year and shall adjust payments to each
hospital accordingly.
(g) (1) (A) The amount of twenty-five million dollars
($25,000,000), made available pursuant to subparagraph (A) of
paragraph (3) of subdivision (b), shall be transferred to the
Workforce Development Program Fund established pursuant to
subparagraph (B).
(B) The Workforce Development Program Fund is hereby established
in the State Treasury. For purposes of this subdivision, "fund" means
the Workforce Development Program Fund.
(1) Moneys in the fund shall, upon appropriation, be used
exclusively for retraining county hospital and clinic systems' health
care workers.
(2) Any moneys remaining in the fund at the end of a fiscal year
shall be carried forward for use in the following fiscal year.
(3) Moneys in the fund shall, upon appropriation, be allocated
from the fund by the Office of Statewide Health Planning and
Development.
(4) By May 1, 2010, counties shall develop and submit work plans
to the Office of Statewide Health Planning and Development for the
implementation of programs and needed investments for workforce
training that are consistent with the implementation of health care
reform at the county level. The Office of Statewide Health Planning
and Development shall provide comments on the work plan within 45
days from the date of submission of the work plan and allocate funds
from the fund within 90 days.
(5) Allocations from the fund shall recognize successful training
programs, either through existing labor-management training
partnerships, or emerging intracounty labor management-initiatives.
(6) Federal financial participation shall be claimed for
expenditures under this subdivision only as authorized by federal law
and regulations.
(h) This section shall be implemented only to the extent that
counties with designated public hospitals seeking reimbursement under
this section contribute toward the cost of care through a county
share of cost.
14167.11. (a) Notwithstanding Article 5.2 (commencing with
Section 14166), for the period of time during which this article is
operative, safety net care pool funds, as defined in subdivision (r)
of Section 14167.1, shall be paid to the designated public hospitals,
as defined in subdivision (e) of Section 14167.1, in accordance with
this section, to the extent that those funds are available.
(b) (1) Each designated public hospital, or the governmental
entity with which it is affiliated, that operates nonhospital clinics
or provides other health care services that are not identified as
hospital services, may report and certify, in accordance with Section
14166.8, all or a portion of its uncompensated costs of the services
furnished to the uninsured. Each designated public hospital, or the
governmental entity with which it is affiliated, shall receive from
the safety net care pool for each fiscal year an amount equal to the
federal funds derived from the certification of uncompensated care
costs pursuant to the preceding sentence. The maximum amount payable
pursuant to this paragraph shall be one hundred million dollars
($100,000,000).
(2) If, for any fiscal year, the amount payable from the safety
net care pool is insufficient for purposes of the payments described
in paragraph (1), each designated public hospital, or governmental
entity with which it is affiliated, shall receive a pro rata share of
the amount specified in paragraph (1). The pro rata amount
determined for purposes of this paragraph shall be based on the
percentage that each designated public hospital's certified
uncompensated medical care costs of medical services provided to
uninsured individuals bears to the total amount of the costs
certified by all of the participating designated public hospitals or
governmental entity with which it is affiliated.
(3) Safety net care pool funds above one hundred million dollars
($100,000,000) in any state fiscal year shall be claimed by the
director for the state's expenditures under Section 14005.333 and
under Part 6.45 (commencing with Section 12699. 201) of Division 2 of
the Insurance Code.
(4) If the expenditures specified in paragraph (3) are
insufficient to claim the full amount of safety net care pool funds
available in any state fiscal year, and the designated public
hospitals, or governmental entities with which they are affiliated,
have certified expenditures in the aggregate in excess of the amount
necessary to make the payments required by this subdivision, the
department shall seek Medicaid federal financial participation from
the safety net care pool to the maximum extent possible based on the
remaining certified public expenditures of the designated public
hospitals and governmental entities with which they are affiliated,
and shall distribute the funds to the designated public hospitals, or
governmental entities with which they are affiliated, based on the
amount of each entity's certified expenditures. If the designated
public hospitals' remaining certified public expenditures exceed the
amount of available safety net care pool funds, the amounts remaining
in the safety net care pool, when claimed, shall be distributed on a
pro rata basis.
(5) Subdivision (a) of Section 14166.21
shall remain operative for the period of time during which this
article is operative, but subdivision (b) of Section 14166.21 shall
be inoperative for the period of time during which this article is
operative.
(c) Except as provided in subdivision (b), subdivision (g) of
Section 14166.8 shall be inoperative for the period of time during
which this article is operative. The department shall seek Medicaid
federal financial participation from the safety net care pool based
on qualifying expenditures from the designated public hospitals or
governmental entity with which it is affiliated.
(d) Payments and funding described in this section shall be
subject to the availability of federal funds through a demonstration
project approved by the federal government pursuant to Section 1115
of the federal Social Security Act.
(e) The director may suspend, modify, or adjust any methodology or
computation required by Article 5.2 (commencing with Section 14166)
that is necessary to implement this section.
14167.12. (a) The department shall consult with the hospital
community, and shall receive input from others as deemed necessary
and appropriate, in developing and implementing any and all payment
methodologies developed or implemented for purposes of this article.
The consultation, with input from others as deemed necessary and
appropriate, shall occur sufficiently in advance of the publication
of any proposed regulation pertaining to any such payment methodology
so as to allow the hospital community, and others as deemed
necessary and appropriate, to have meaningful participation and offer
comments as well as to allow the department an opportunity to
consider additional information and engage in follow-up discussions.
(b) The director shall seek federal approval of each payment
methodology set forth in this article. The director, in consultation
with the hospital community, and with input from others as deemed
necessary and appropriate, may alter any methodology specified in
this article to the extent necessary to meet the requirements of
federal law or regulations or to obtain federal approval. If, after
seeking federal approval, federal approval is not obtained, that
methodology shall not be implemented.
(c) Payments made pursuant to this article are contingent on the
receipt of federal reimbursement.
(d) In implementing this article, the department may utilize the
services of the Medi-Cal fiscal intermediary through a change order
to the fiscal intermediary contract to administer this program,
consistent with the requirements of Sections 14104.6, 14104.7,
14104.8, and 14104.9. Contracts entered into with any Medicare fiscal
intermediary shall not be subject to Part 2 (commencing with Section
10100) of Division 2 of the Public Contract Code.
(e) Except as otherwise provided in this article, Sections
14166.11 to 14166.14, inclusive, Sections 14166.17 to 14166.20,
inclusive, and Sections 14166.22 and 14166.23, shall be inoperative
for the period of time during which this article is operative.
(f) This article shall become inoperative five years after the
implementation date of this article and as of January 1, 2016, is
repealed, unless a later enacted statute that is enacted on or before
January 1, 2016, extends or deletes the dates on which it becomes
inoperative and is repealed.
(g) This article shall be applicable to services rendered to
Medi-Cal beneficiaries on and after July 1, 2010. For services that
are paid under this article, any other provider rate methodology,
including those established by the California Medical Assistance
Commission pursuant to Article 2.6 (commencing with Section 14081),
shall become inoperative for those services on and after that date.
(h) This article shall not apply to any service furnished prior to
the effective date of any federal approvals that may be required to
ensure the availability of federal financial participation for
expenditures made pursuant to this article.
(i) This article shall become inoperative in the event, and on the
effective date, of a final judicial determination by any court of
appellate jurisdiction or a final determination by the federal
Department of Health and Human Services or the Centers for Medicare
and Medicaid Services that any element of this article cannot be
implemented.
(j) The department shall implement this article only to the extent
that state funds are appropriated for the nonfederal share of the
rate increases provided in this article.
(k) If this article becomes inoperative, hospitals shall be paid
the rates that were in effect on June 30, 2010, including the rates
paid pursuant to the provision of Article 2.6 (commencing with
Section 14081).
(l) This article shall be implemented only during those fiscal
years in which a 4 percent fee is imposed on the net patient revenue
of general acute care hospitals.
SEC. 77. Article 5.215 (commencing with Section 14167.22) is added
to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions
Code, to read:
Article 5.215. Medi-Cal Physician Services Rate Increase Act
14167.22. (a) The director shall seek federal approval of the
rate methodology set forth in this article. The director may alter
any methodology specified in this article, to the extent necessary to
meet the requirements of federal law or regulations or to obtain
federal approval. If, after seeking federal approval, federal
approval is not obtained, that methodology shall not be implemented.
(b) Payments made pursuant to this article are contingent on the
receipt of federal reimbursement. Unless otherwise expressly provided
in this article, nothing in this article shall create an obligation
on the part of the department to fund any payment from state funds in
the absence of, or on account of a shortfall in, federal funding.
(c) The director shall increase reimbursement rates to managed
health care plans by the actuarially equivalent amount necessary to
ensure that managed health care plans increase rates of payment to
the classes of providers whose rates are governed by this article at
the same percentage increase that Medi-Cal fee-for-service rates are
increased to the same classes of providers pursuant to this article,
subject to the limitations of federal law, if any.
14167.23. For purposes of this article, the following definitions
shall apply:
(a) "Nonphysician medical practitioner" means a physician's
assistant, a certified nurse midwife, or a nurse practitioner, who
provides primary care services, as defined in Section 51170.5 of
Title 22 of the California Code of Regulations, who is an enrolled
Medi-Cal provider eligible to receive Medi-Cal payments, and who
provides physician services to Medi-Cal beneficiaries. Primary care
physician services rendered by nonphysician medical practitioners are
covered as physician services to the extent permitted by applicable
licensing statutes and regulations. The terms "physician's assistant,"
"nurse midwife," and "nurse practitioner" are defined for purposes
of this article in Sections 51170.1, 51170.2, and 51170.3 of Title 22
of the California Code of Regulations, respectively.
(b) "Physician" means a practitioner meeting the requirements of
Section 51228 of Title 22 of the California Code of Regulations who
is an enrolled Medi-Cal provider eligible to receive Medi-Cal
payments and who provides physician services to Medi-Cal
beneficiaries.
(c) "Physician group" means two or more physicians legally
organized as a partnership, professional corporation, foundation,
not-for-profit corporation, or similar association that meets the
requirements of Section 51000.16 of Title 22 of the California Code
of Regulations and that is an enrolled Medi-Cal provider eligible to
receive Medi-Cal payments and provides physician services to Medi-Cal
beneficiaries.
(d) "Physician services" means those services as described in
Section 51305 of Title 22 of the California Code of Regulations.
(e) "Podiatrist" means a person as defined in Section 51075 of
Title 22 of the California Code of Regulations who is an enrolled
Medi-Cal provider eligible to receive Medi-Cal payments and who
provides physician services to Medi-Cal beneficiaries.
(f) "Clinic" means an organized outpatient health facility as
defined in Section 1200 of the Health and Safety Code.
14167.24. (a) A physician, physician group, clinic, podiatrist,
or nonphysician medical practitioner shall receive Medi-Cal
reimbursement to the extent provided in this section.
(b) Physician services, including those rendered by physicians,
physician groups, podiatrists, and nonphysician medical
practitioners, shall be calculated and paid as follows:
(1) Except as provided under Section 14167.25, and only to the
extent that state funds are appropriated in the annual Budget Act,
commencing on July 1, 2010, reimbursement shall be established at a
percentage of the amount that the federal Medicare Program would pay
for the same physician service rendered on the same date; provided,
however, that such increased reimbursement shall not exceed 100
percent of the amount that Medicare would pay. This paragraph shall
not reduce physician service rates currently reimbursed at or above
100 percent of the Medicare reimbursement rate or the rate that the
department determines to be equivalent to the Medicare rate pursuant
to paragraph (3). In determining the amounts to be paid pursuant to
this paragraph, the department shall ensure that the equivalent
Medicare rate to be used takes into account all of the factors,
supplemental payments, and other variables that are used to determine
the Medicare rate.
(2) The supplemental rate augmentation paid for physician services
in California Children Services, as established in the annual Budget
Act, shall continue and be paid in addition to the rate established
in this section.
(3) Subject to the funding limitation set forth in paragraph (1),
the department shall establish a rate for physician services for
which Medicare does not provide a comparable physician service, or
for which the Medicare payment for the physician service cannot be
separately determined, which shall be the department's best estimate
of what Medicare would pay for that physician service, to be set at
the percentage established in paragraph (1).
(4) Physician services that are reimbursable under this section
may be provided in any service location, including in clinics, except
for hospitals when the hospital bills for the services, federally
qualified health centers, and rural health centers. Notwithstanding
the provisions of Section 14167.23, physicians, physician groups,
podiatrists, and nonphysician medical practitioners that provide
physician services in clinics shall not be required to be enrolled as
Medi-Cal providers in order for a clinic to receive reimbursement
for those services pursuant to this section.
(5) Claims for payment of services rendered by a nonphysician
medical practitioner, where the rate is established pursuant to this
section, shall comply with the provisions of subdivision (d) of
Section 51503.1 of Title 22 of the California Code of Regulations.
(c) As a condition of receiving reimbursement under this section,
a physician, physician group, clinic, podiatrist, or nonphysician
medical practitioner shall keep, maintain, and have readily
retrievable, any records specified by the department to fully
disclose reimbursement amounts to which the physician, physician
group, clinic, podiatrist, or nonphysician medical practitioner is
entitled, and any other records required by the federal Centers for
Medicare and Medicaid Services.
(d) This section shall apply to all services specified in this
section that are rendered to Medi-Cal beneficiaries on and after July
1, 2010. With respect to all services that are paid under this
section, any other provider rate methodology that is inconsistent or
duplicative of the rates paid pursuant to this section shall become
inoperative for those services to the extent that the rates are
inconsistent or duplicative.
14167.25. (a) (1) Notwithstanding Section 14105 or any other
provision of law, on or after July 1, 2010, the director may
designate up to 25 percent of the rate increase paid to Medi-Cal
fee-for-service providers pursuant to subdivision (b) of Section
14167.24, to be directly linked to performance measures developed
pursuant to subdivisions (c) and (d), including a demonstrated
showing of continued performance improvement.
(2) For purposes of paragraph (1), the percentage of the rate that
is linked to performance measures shall be established by the
director such that physicians, physician groups, clinics,
podiatrists, and nonphysician medical practitioners will be
sufficiently reimbursed for implementing performance measures,
including continued performance improvement.
(b) The performance measures shall be developed by the department
in consultation with stakeholders, including, but not limited to,
representatives of patients, physicians, podiatrists, nonphysician
medical practitioners, managed care plans, payers, and other
appropriate stakeholders.
(c) The department, in consultation with the stakeholders
identified in subdivision (b), shall develop a comprehensive list of
performance measures relying, in part, on existing quality and
performance measures endorsed by national organizations, such as the
Ambulatory Quality Alliance, the Hospital Quality Alliance, and the
National Quality Forum.
(d) In developing the performance measures pursuant to subdivision
(c), the following performance measures may be taken into
consideration in determining the appropriate percentage rate
increases:
(1) Reporting of health care outcomes, including the cost of that
health care.
(2) Improvements in health care efficiency.
(3) Improvements in health care safety.
(4) The efficient exchange of health information data through
technology.
(5) The quality assurance requirements set forth in Section
1300.70 of Title 28 of the California Code of Regulations.
(6) Efforts to promote healthy behaviors among Medi-Cal
beneficiaries pursuant to the Healthy Incentives and Rewards Program
described in Section 14132.105.
(7) The extent to which purchasers, payers, providers, and
consumers are able to monitor the quality and cost of health care
utilizing public reporting information published by the Office of the
Patient Advocate.
(8) The extent to which physicians, physician groups, clinics,
podiatrists, and nonphysician medical practitioners that provide
services to Medi-Cal beneficiaries on a fee-for-service basis
implement activities, such as telemedicine, electronic prescribing
and the electronic exchange of health information among various
payers and providers for the purpose of attaining health care safety
and quality improvements, informed clinical care decisions, the
increased use of interoperable platforms for the exchange of relevant
health care data, and more accurate and timely diagnosis and
treatment.
(9) Compliance with the federal Health Insurance Portability and
Accountability Act (HIPAA) (42 U.S.C. Sec. 300gg).
(e) The department shall consult with stakeholders, including, but
not limited to, representatives of patients, physicians, managed
care plans, payers, and other appropriate stakeholders, to determine
the means to measure and document implementation by each physician,
physician group, clinic, podiatrist, and nonphysician medical
practitioner of the performance measures developed pursuant to
subdivisions (c) and (d).
(f) The department may exempt classes of physicians, physician
groups, clinics, podiatrists, and nonphysician medical practitioners
and specific services from this section, if necessary to comply with
the requirements of federal law or regulations.
(g) The department may file one or more state plan amendments to
implement this section.
(h) The department shall seek necessary federal approvals for
implementation of this section. The department shall implement this
section only in a manner that is consistent with federal Medicaid law
and regulations. This section shall be implemented only to the
extent that federal approval is obtained and federal financial
participation is available.
(i) The department shall implement this section only to the extent
that state funds are appropriated for the nonfederal share of the
rate increases provided under this section.
(j) The provisions of this section shall be implemented in such a
manner that they are appropriately integrated with the
pay-for-performance model described in subdivision (a) of Section
12803.2 of the Government Code.
SEC. 78. The State Department of Health Care Services, in
consultation with the Managed Risk Medical Insurance Board, shall
take all reasonable steps that are required to obtain the maximum
amount of federal funds and to support federal claiming procedures in
the administration of this act.
SEC. 80. Notwithstanding any other provision of law, the Managed
Risk Medical Insurance Board may implement the provisions of this act
expanding the Healthy Families Program only to the extent that funds
are appropriated for those purposes in the annual Budget Act or in
another statute.
SEC. 81. (a) In order to achieve the purposes of this act, the
State Department of Health Care Services, after consultation with the
Department of Finance, may utilize either state plan amendments or
waivers, or combination thereof, as necessary to implement this act,
to maximize the availability of federal financial participation, and
to maximize the number of persons for whom that federal financial
participation is available to cover the cost of health care services.
(b) The flexibility authorized by this act shall include
modification of the requirements, standards, and methodologies for
expansion categories or populations created by this act in order to
maximize the availability of federal financial participation. When
exercising this flexibility, the State Department of Health Care
Services shall not make changes that would do any of the following:
(1) Make otherwise eligible individuals ineligible for health
coverage under the Medi-Cal program and the Healthy Families Program.
(2) Increase cost-sharing amounts beyond levels established in
this act.
(3) Reduce benefits below those provided for in this act.
(4) Otherwise disadvantage applicants or recipients in a way not
contemplated by this act.
(c) The department shall take all reasonable steps necessary to
maximize federal financial participation and to support federal
claiming in the implementation of this act.
(d) It is the intent of the Legislature that the provisions of
this act shall be implemented simultaneously to the extent possible
in order to harmonize and best effectuate the purposes and intent of
this act.
(e) The Director of Health Care Services shall notify the Chair of
the Joint Legislative Budget Committee in any case when it is
necessary to exercise the flexibility provided under this section.
This notification shall be provided 30 days prior to exercising that
flexibility.
SEC. 82. It is the intent of the Legislature that provisions of
this act shall be financed by contributions from employers;
individuals; federal, state, and local governments; and health care
providers. Specifically financial support shall include:
(a) Federal financial participation through the federal Medicaid
and S-CHIP programs.
(b) Revenue from counties to support the cost of enrolling persons
who would otherwise be entitled to county-funded care if not for
this act.
(c) Fees paid by acute care hospitals at a rate of 4 percent of
patient revenues.
(d) Fees paid by employers.
(e) Premium contributions from currently offering employers when
employees, eligible for employer-based coverage, choose to enroll in
public programs.
(f) Premium payments for individuals enrolled in publicly
subsidized coverage and coverage purchased in the individual market.
(g) Additional public funds obtained through increasing the tax on
the sale of each package of cigarettes.
(h) Other state funds made available through savings generated
through reduced demand for existing health care programs.
SEC. 83. (a) Notwithstanding any other provision of this act, the
implementation of the provisions of this act other than this
section, including, but not limited to, the expansion of eligibility
for publicly funded or subsidized health care coverage, the increase
in the Medi-Cal program's provider rates, the requirements imposed on
the offering and sale of health plan contracts or health insurance
policies in the state, and the requirement that individuals enroll in
and maintain health care coverage, shall be contingent on a finding
by the Director of Finance under subdivision (b) that the financial
resources necessary to implement those provisions are available.
(b) Except as otherwise provided in subdivision (d), this act
shall become operative upon the date that the Director of Finance
files a finding with the Secretary of State that all of the following
circumstances exist:
(1) Based on reasonable financial projections, sufficient state
resources will exist in the Health Care Trust Fund to implement the
act. This determination shall be based on the projected amounts of
revenue that will be available to support the act and the projected
costs required by the act. These projections shall consider and
include the sufficiency of resources that will be available
during the first three years of operation under the act.
(2) The required federal approvals for program changes under the
act have been obtained or can reasonably be expected to be obtained
by the time those programs are implemented.
(3) Required federal resources will be available to implement the
act based on the anticipated schedule of review and approval of state
plan amendments and waivers applicable to the act.
(c) At least 90 days prior to filing the finding with the
Secretary of State, the Director of Finance shall transmit the
finding described in subdivision (b) to the Chief Clerk of the
Assembly, the Secretary of the Senate, and the chairs of the
appropriate committees of the Legislature.
(d) If any operative date specified in this act is later than the
date of the filing of the finding described in subdivision (b), that
later date shall apply.
(e) Nothing in this section shall be construed to prevent the
appropriation of funds for the support of the activities necessary to
prepare for the implementation of this act prior to the filing of
the finding described in subdivision (b).
SEC. 83.5. It is the intent of the Legislature that
credits against employer contributions to finance Cal-CHIPP be for
health expenditures that do not discriminate on the basis of wage
level and that allow employees eligible for Cal-CHIPP or Medi-Cal to
choose to enroll in those programs by bringing the employer
contribution to the Cal-CHIPP or the Medi-Cal program.
SEC. 84. It is the intent of the Legislature that the state shall
develop and effectively implement a transition plan, by July 1, 2010,
that will allow for payment of the premium and cost-sharing burdens
associated with insurance coverage with funding under the federal
Ryan White Comprehensive AIDS Resources Emergency (CARE) Act of 1990
(42 U.S.C. Sec. 201) and other funding.
SEC. 84.5. The Legislature finds and declares that each provision
of this act is an integral part of a comprehensive health care reform
effort and that no provision of this act is intended to be severable
from the remaining provisions. If any provision of this act is held
to be invalid, as determined by a final judgment of a court of
competent jurisdiction, the entire act shall become inoperative, and
those provisions of law amended by this act that were in effect and
operative immediately prior to the operative date of this act shall
again be operative.
SEC. 85. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution for
certain costs that may be incurred by a local agency or school
district because, in that regard, this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
However, if the Commission on State Mandates determines that this
act contains other costs mandated by the state, reimbursement to
local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division 4 of
Title 2 of the Government Code.