BILL ANALYSIS                                                                                                                                                                                                    

                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           1163 (Leno)
          Hearing Date:  5/27/2010        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  

          *Managed Care Fund
          **Insurance Fund


          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.