BILL ANALYSIS                                                                                                                                                                                                    

                                                                  SB 1169
                                                                  Page  1

          Date of Hearing:   June 30, 2010

                                Felipe Fuentes, Chair

                   SB 1169 (Lowenthal) - As Amended:  May 28, 2010 

          Policy Committee:                             Health Vote:12-5

          Urgency:     No                   State Mandated Local Program:   
          Yes    Reimbursable:              No


          This bill requires health plans and health insurers (carriers)  
          to assign tracking numbers to provider claims and to submit  
          related documentation. Specifically, this bill: 

          1)Requires carriers to provide acknowledgement of receipt of a  
            claim submission, including the tracking number, by email or  
            in writing if a provider has opted out of electronic  

          2)Requires carriers to provide acknowledgement of a receipt of  
            additional information, including the tracking number, for  
            claims previously submitted and deemed incomplete. Requires  
            notification by email or in writing. 

          3)Specifies carriers must provide mental health parity, pursuant  
            to current law requirements, without any form of treatment  
            limitation or limitation of receipt of benefits.  

           FISCAL EFFECT  

          1)Unknown, likely absorbable workload to the California  
            Department of Managed Health Care (DMHC) to continue oversight  
            of health plan reimbursement practices. Minor absorbable  
            workload to the California Department of Insurance (CDI) to  
            continue oversight of health insurers. 

          2)Federal health reform, the Patient Protection and Affordable  
            Care Act (PL-111-148) includes provisions which may reduce the  
            impact of the requirements of this bill over the next several  
            years. The federal reform changes include several provisions  
            related to administrative streamlining and standardization. 


                                                                  SB 1169
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           1)Rationale  .  This bill is co-sponsored by four organizations:  
            the American Association of Marriage and Family Therapists,  
            California Division, the California Coalition for Mental  
            Health, the California Psychiatric Association, and the Mental  
            Health Association in California. According to the author and  
            sponsor, providers of mental health services are frequently  
            told by health plans and insurers that claims and requests for  
            prior authorization have not been received. This bill  
            establishes a requirement for tracking numbers to be assigned  
            to claims and requests and for carriers to provide  
            documentation to providers according to specified timelines. 

           2)Mental Health Parity  . AB 88 (Thompson), Chapter 524, Statutes  
            of 1999 established partial mental health parity in  
            California. AB 88 requires treatment parity for "serious  
            mental illness" (SMI) such as schizophrenia, autism, and  
            anorexia nervosa. Under current law, less serious mental  
            health issues are subject to utilization controls such as  
            annual caps on number of visits and patient co-payments that  
            exceed co-payments for other medical treatment.  AB 1600  
            (Beall), pending in the Senate, expands parity to other mental  
            illnesses specified in the Diagnostic and Statistical Manual  
            of Mental Disorders (DSM)-IV to include less serious mental  
            illness such as low-grade depression and anxiety. 

           3)Concerns  . This bill is opposed by the California Association  
            of Health Plans (CAHP), the Association of California Life and  
            Health Insurance Companies (ACLHIC), and several specific  
            health insurance companies. CAHP indicates this bill imposes  
            unnecessary administrative costs and creates complicated  
            notifications at a time when increased health care costs are  
            leading to reduced health coverage. 

          ACLHIC asserts this bill will duplicate many existing  
            communication practices and add unnecessary administrative  
            costs to claims processes. According to carriers, current law  
            already requires acknowledge of a receipt of a claim within 15  
            days and requires processing of claims within 30 days or face  
            accrual of 10% interest accrual.  


                                                                  SB 1169
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           Analysis Prepared by  :    Mary Ader / APPR. / (916) 319-2081