BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           1169 (Lowenthal)
          
          Hearing Date:  5/27/2010        Amended: 4/26/2010
          Consultant: Katie Johnson       Policy Vote: Health 7-2
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          BILL SUMMARY:  SB 1169 would require health care service plans  
          and health insurers to assign a tracking number to a claim or a  
          provider request for authorization, provide acknowledgment of  
          its receipt, and use the tracking number in subsequent  
          communications. The bill would also clarify that any form of  
          treatment or benefit limitation for mental health care services  
          be applied under the same terms as other benefits under the plan  
          or policy.
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                            Fiscal Impact (in thousands)

           Major Provisions         2010-11      2011-12       2012-13     Fund
                                                                  
          DMHC regulations                up to $130   up to  
          $170ongoingSpecial*
                                                       likely minor

          *Managed Care Fund
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          STAFF COMMENTS: SUSPENSE FILE. AS PROPOSED TO BE AMENDED.

          Mental Health Services

          Existing law requires that the terms and conditions applied to  
          mental health benefits be applied equally to all benefits under  
          the health plan or policy including maximum lifetime benefits,  
          copayments and coinsurance, and individual and family  
          deductibles. Although existing law currently provides for the  
          diagnosis and treatment of severe mental illness and severe  
          emotional disturbances of a child under the same terms and  
          conditions applied to other medical conditions, this bill would  
          clarify the requirement further. This bill would clarify that  
          any form of treatment or benefit limitation for mental health  
          care services would be applied under the same terms as other  










          benefits under the health plan or policy. Treatment or benefit  
          limitations or actions include maximum lifetime benefits,  
          copayments and coinsurance, and individual and family  
          deductibles.

          If the Department of Managed Health Care (DMHC) needed to update  
          the existing regulations on mental health parity, staff could  
          cost up to $130,000 in FY 2010-2011 and up to $170,000 in FY  
          2011-2012 in special funds. Ongoing costs would likely be minor.  
          Any fiscal impact on the California Department of Insurance  
          (CDI) would be minor and absorbable.
          
          Tracking Claims and Treatment Authorization Requests

          This bill would require health care service plans and health  
          insurers, collectively carriers, to assign a tracking number to  
          claims and provider requests for treatment 
          Page 2
          SB 1169 (Lowenthal)

          authorization, provide acknowledgment of receipt to both  
          providers and enrollees, and use the tracking number in  
          subsequent communications. This bill would also require that, if  
          a claim is contested on the basis that the carrier has not  
          received all necessary information to complete it, carriers  
          would be required within three working days of receipt of any of  
          the additional information to provide acknowledgment of receipt.  
          This bill would provide that all communications of  
          acknowledgment of receipt of claims, requests for treatment  
          authorization, and additional claims information be communicated  
          via email unless the claimant or provider requests that receipts  
          be sent in writing.

          Existing law provides that claims be processed within 30 working  
          days for insurers and health plans and within 45 working days if  
          the health plan is a managed care organization and that  
          treatment authorizations be approved in a timely fashion not to  
          exceed five business days unless the request is retroactive or  
          urgent and for the claimant, beneficiary, and provider to be  
          notified upon completion. It does not require carriers to  
          acknowledge the receipt of a claim or a treatment authorization  
          request or to assign a tracking number.

          Since carriers likely utilize computerized claims systems, it is  
          possible that they would already assign tracking numbers to  
          claims. It is unknown how many carriers currently track claims.  










          Additionally, it is unknown if carriers assign tracking numbers  
          to treatment authorization requests or whether or not they send  
          a receipt of claims or treatment authorization requests to  
          enrollees and providers.

          Carriers could need to invest in software changes, updates, or  
          augmentations in order to 1) track claims, 2) track treatment  
          authorization requests, and 3) have the ability to notify  
          enrollees and providers of the receipt of claims and treatment  
          authorization requests in order to comply with this bill. 

          The proposed amendments would limit the notification of receipt  
          of claims and treatment authorizations to only providers instead  
          of both providers and enrollees.