BILL ANALYSIS SB 1169 Page 1 Date of Hearing: June 30, 2010 ASSEMBLY COMMITTEE ON APPROPRIATIONS 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 SUMMARY 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 communication. 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 Page 2 COMMENTS 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 Page 3 Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081