BILL ANALYSIS Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair 1163 (Leno) Hearing Date: 5/17/2010 Amended: 4/28/2010 Consultant: Katie Johnson Policy Vote: Health 5-0 _________________________________________________________________ ____ BILL SUMMARY: SB 1163 would require health care service plans and health insurers to submit specified data regarding coverage denials, rates, and cost-sharing to their respective regulators, the Department of Managed Health Care (DMHC) and the California Department of Insurance (CDI). _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2010-11 2011-12 2012-13 Fund DMHC review of data $240 $130 $140 Special* CDI review of data $125 $210 $210 Special** *Managed Care Fund **Insurance Fund _________________________________________________________________ ____ STAFF COMMENTS: This bill meets the criteria for referral to the Suspense File. In order for DMHC and CDI to review and validate all of the data submitted by health care service plans and health insurers and to post it on their websites, DMHC and CDI would need additional staff at a cost of approximately $240,000 in FY 2010-2011, $130,000 in FY 2011-2012, and $140,000 in FY 2012-2013 and ongoing, and $125,000 in FY 2010-2011 and $210,000 in FY 2011-2012 and ongoing, respectively. Since the portion of this bill that requires plans and insurers to submit data related to enrollment denials sunsets in January 1, 2014, upon the enactment of federal health reform, it is possible that the departments' respective ongoing workload could decrease. This bill would require health care service plans and health insurers to provide information to DMHC, CDI, the Managed Risk Medical Insurance Board (MRMIB), and the public regarding denials of coverage and premium rates. The Patient Protection and Affordable Care Act (PPACA), or federal health care reform, requires that rate reviews commence with the 2010 federal fiscal year. Although not directly linked, this data could potentially aid DMHC and CDI in performing those rate reviews. PPACA provides $250 million for premium rate review to be distributed over five years to states in the form of grants of $1 million - $5 million based on a state's population and the number of carriers. It is unclear when this money will be distributed or what California's share will be. The Secretary of the Department of Health and Human Services (HHS) has issued a request for comments on the implementation of states' annual rate review processes. Depending on HHS guidance and upon the receipt of funds, the state could potentially use these funds to offset DMHC and CDI's costs to implement this bill.