BILL ANALYSIS SENATE HEALTH COMMITTEE ANALYSIS Senator Elaine K. Alquist, Chair BILL NO: AB 2345 A AUTHOR: De La Torrre B AMENDED: June 16, 2010 HEARING DATE: June 30, 2010 2 CONSULTANT: 3 Hansel/cjt 4 5 SUBJECT Health care coverage: federal health care reform SUMMARY Requires group and individual health care service plan contracts and health insurance policies to provide coverage, and not impose cost-sharing requirements, for preventive services as specified by the Patient Protection and Affordable Care Act (PPACA). Expresses the intent of the Legislature to enact legislation to adopt as state law various patient protection provisions of the PPACA and to require DMHC and the Department of Insurance to post a link on their respective Internet websites to the Internet website of the federal Department of Health and Human Services to provide information about affordable and comprehensive health care coverage options. CHANGES TO EXISTING LAW Existing federal law: Requires, under the PPACA (Public Law 111 - 148), health plans and issuers, subject to the minimum interval established by the US Secretary Health and Human Services, to provide coverage, and not impose cost-sharing Continued--- STAFF ANALYSIS OF ASSEMBLY BILL 2345 (De La Torre) Page 2 requirements, for the following preventive services with respect to plan years beginning on and after September 23, 2010 Evidence-based items or services that have in effect a rating of `A' or `B' in the current recommendations of the United States Preventive Services Task Force, with specified exceptions. Immunizations that have in effect a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention with respect to the individual involved; and With respect to infants, children, and adolescents, evidence-informed preventive care and screenings provided for in the comprehensive guidelines supported by the Health Resources and Services Administration. With respect to women, such additional preventive care and screenings not otherwise described above as provided for in comprehensive guidelines supported by the Health Resources and Services Administration for purposes of this paragraph. Provides under that PPACA that a plan or issuer may provide coverage for services in addition to those recommended by United States Preventive Services Task Force, and may deny coverage for services that are not recommended by the Task Force. Contains, under the PPACA, numerous consumer and patient protections, including those that: Prohibit sponsors of group health plans, other than self-insured plans, from establishing eligibility rules for full-time employees that are based on the total hourly or annual salary, or otherwise have the effect of discriminating in favor of higher- wage employees. Require health plans and insurers to implement processes for appeals of coverage determinations and claims that meet certain minimum requirements, including providing notice and information to enrollees in a culturally and linguistically appropriate manner; allowing an enrollee to review their file, present STAFF ANALYSIS OF ASSEMBLY BILL 2345 (De La Torre) Page 3 evidence and testimony as part of the appeals process, and receive continued coverage pending the outcome of the appeals process; and providing an external review process that meets certain minimum requirements, as specified. Require health care service plans and health insurers to comply with specified patient protections pertaining to choice of provider, coverage of emergency conditions, designation of pediatric specialists as primary care providers, and access to ob/gyns, and establishment of medical reimbursement data centers, as specified. Requires, under the PPACA, the Secretary of the U.S. Department of Health and Human Services, no later than July 1, 2010, to establish a mechanism, including an Internet website, through which a resident of any state may identify affordable health insurance coverage options in that state. Existing state law: Provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and of health insurers by the Department of Insurance. Requires DMHC-regulated health plans to provide all medically necessary basic health care services, as defined. Permits DMHC to define the scope of the required services and to exempt plans from the requirement for good cause. Requires every health plan or insurer that covers hospital, medical, or surgical expenses, on a group basis, to provide certain preventive health care benefits for children, including immunizations. This bill: Requires group and individual health care service plan contracts and health insurance policies issued, amended, renewed, or delivered on or after September 23, 2010, to provide coverage, and not impose cost-sharing requirements, for preventive services as specified by the PPACA, subject to the minimum interval established by the U.S. Secretary of Health and Human Services pursuant to the PPACA. Expresses the intent of the Legislature to enact legislation to adopt as state law the patient protection provisions of the PPACA dealing with eligibility of STAFF ANALYSIS OF ASSEMBLY BILL 2345 (De La Torre) Page 4 employees for group health coverage and prohibiting discrimination in favor of higher-wage employees; appeals of coverage determinations and claims; and patient protections pertaining to choice of provider, coverage of emergency conditions, designation of pediatric specialists as primary care providers, and access to ob/gyns, and provide for establishment of medical reimbursement data centers, as specified. Expresses intent to enact legislation to require DMHC and the Department of Insurance to post a link on their respective Internet websites to the Internet website of the federal Department of Health and Human Services where consumers may easily obtain information about affordable and comprehensive health care coverage options under the PPACA. FISCAL IMPACT The bill in its present amended form has not been analyzed by a fiscal committee. BACKGROUND AND DISCUSSION According to the author, AB 2345 will require group or individual health care service plans and insurers to provide preventive health care services with no cost-sharing, in accordance with the requirements of the PPACA. The bill also expresses intent to adopt provisions in the PPACA prohibiting group health plans from discriminating in favor of highly compensated individuals as to their eligibility to participate in the plan and benefits included in the plan, requiring plans and insurers to provide an internal claims and appeals process, requiring plans and insurers to comply with several patient protections in the PPACA, and to require DMHC and CDI to post a link on their websites and to the website the U.S. Department of Health and Human Services they will be developing pursuant to the PPACA, to enable consumers to easily obtain information about affordable and comprehensive health care coverage options. U.S. Preventive Services Task Force STAFF ANALYSIS OF ASSEMBLY BILL 2345 (De La Torre) Page 5 Included in the preventive services, this bill would require health plans and insurers to cover effective September 23, 2010, are those services that have an 'A' or 'B' rating in the most current recommendations of the U.S. Preventive Services Task Force (USPSTF). The USPSTF, first convened by the U.S. Public Health Service in 1984, and since 1998 sponsored by the Agency for Healthcare Research and Quality (AHRQ), is the leading independent panel of private-sector experts in prevention and primary care. The USPSTF conducts rigorous, impartial assessments of the scientific evidence for the effectiveness of a broad range of clinical preventive services, including screening, counseling, and preventive medications. Its recommendations are considered the "gold standard" for clinical preventive services. The USPSTF makes recommendations that certain services be provided based on the risk and benefit of the service and the level of evidence supporting the provision of the service, and classifies services as follows: Level A: Good scientific evidence suggests that the benefits of the clinical service substantially outweighs the potential risks. Clinicians should discuss the service with eligible patients. Level B: At least fair scientific evidence suggests that the benefits of the clinical service outweighs the potential risks. Clinicians should discuss the service with eligible patients. Level C: At least fair scientific evidence suggests that there are benefits provided by the clinical service, but the balance between benefits and risks are too close for making general recommendations. Clinicians need not offer it unless there are individual considerations. Level D: At least fair scientific evidence suggests that the risks of the clinical service outweighs potential benefits. Clinicians should not routinely offer the service to asymptomatic patients. Level I: Scientific evidence is lacking, of poor quality, or conflicting, such that the risk versus benefit balance cannot be assessed. Clinicians should STAFF ANALYSIS OF ASSEMBLY BILL 2345 (De La Torre) Page 6 help patients understand the uncertainty surrounding the clinical service. Advisory Committee on Immunization Practices Also included in the preventive services that health plans and insurers would be required to cover are immunizations that have in effect a recommendation from the Advisory Committee on Immunization Practices (ACIP) of the Centers for Disease Control and Prevention (CDC). The ACIP consists of 15 experts in fields associated with immunization, who have been selected by the Secretary of the U. S. Department of Health and Human Services to provide advice and guidance to the Secretary, the Assistant Secretary for Health, and the Centers for Disease Control and Prevention on the control of vaccine-preventable diseases. In addition to the 15 voting members, ACIP includes 8 ex officio members who represent other federal agencies with responsibility for immunization programs in the United States, and 26 non-voting representatives of liaison organizations that bring related immunization expertise. The role of the ACIP is to provide advice that will lead to a reduction in the incidence of vaccine-preventable diseases in the United States, and an increase in the safe use of vaccines and related biological products. The committee develops written recommendations for the routine administration of vaccines to children and adults in the civilian population; recommendations include age for vaccine administration, number of doses and dosing interval, and precautions and contraindications. The ACIP is the only entity in the federal government that makes such recommendations. HRSA Guidelines for preventive care and screenings for infants, children and adolescents (Bright Futures Guidelines) Under the bill, health plans and insurers would be required to cover evidence-informed preventive care and screenings for infants, children, and adolescents, as provided for in the comprehensive guidelines supported by the Health Resources and Services Administration (HRSA) (referred to as the Bright Futures Guidelines). These are comprehensive guidelines addressing health promotion and disease prevention in infancy, early childhood, middle childhood, STAFF ANALYSIS OF ASSEMBLY BILL 2345 (De La Torre) Page 7 and adolescence. Through collaboration between the HRSA Maternal and Child Health Bureau and the National Center for Education in Maternal and Child Health at Georgetown University in Washington, D.C., the Bright Futures Guidelines were developed by interdisciplinary panels of experts from a wide variety of child health fields, such as dental care, nutrition, nursing, and pediatrics. Related bills AB 1602 (Perez) among its provisions, requires, effective September 23, 2010, health plans and health insurers to, at minimum, provide coverage for and not impose any cost- sharing requirements for preventive services as specified by the PPACA. Scheduled to be heard in Senate Health Committee on June 30, 2010. AB 2787 (Monning) establishes the Office of the California Health Ombudsman, to educate consumers on their health care coverage rights and responsibilities, assist consumers with enrollment in health care coverage, and resolve problems with obtaining federal premium tax credits. Scheduled to be heard in Senate Health Committee on June 30, 2010. Arguments in opposition The Association of California Life and Health Insurance Companies has taken an oppose unless amended position. ACLHIC states that at this time, it has not been officially determined whether the PPACA requires health insurers to cover out-of-network preventative services. ACLHIC requests an amendment to clarify that if PPACA (through future clarification or regulation) is interpreted to not include coverage for out-of-network services, then California law would also not require coverage for out-of-network services. PRIOR ACTIONS (Prior version of bill) Assembly Health: 13-0 Assembly Floor: 52-11 COMMENTS STAFF ANALYSIS OF ASSEMBLY BILL 2345 (De La Torre) Page 8 1. Existing patient protections may be stronger in some cases. With regard to some of the patient protections of the PPACA that the bill expresses intent to conform to, for example, appeals processes for coverage determinations and coverage of emergency conditions, existing California law may be stronger than the PPACA. A suggested amendment would be to delete subdivisions (a) - (c) of Section 3 of the bill, which express the intent of the Legislature to enact legislation to conform to the PPACA with regard to eligibility for group coverage, choice of provider, appeals processes, and coverage of emergency conditions, to allow for a more complete analysis of how state and federal law compare in these areas. POSITIONS Support: None received Oppose: Association of California Life and Health Insurers Companies (unless Amended) -- END --