BILL ANALYSIS Ó AB 922 Page 1 Date of Hearing: May 18, 2011 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair AB 922 (Monning) - As Amended: March 29, 2011 Policy Committee: HealthVote:12-6 Urgency: No State Mandated Local Program: No Reimbursable: No SUMMARY This bill creates an independent office of health coverage consumer assistance, called the Office of Health Consumer Assistance (OHCA), in state government. Specifically, this bill: 1)Requires the new office to: a) Maintain a HealthHelp website and call center. b) Perform outreach and education on navigating the health care system, including advice regarding eligibility and enrollment in private and public health care programs. c) Advise consumers on how to resolve care, service, and claims payment problems, and provide direct assistance if needed. d) Assist consumers in accessing federal premium tax credits for health care coverage. e) Assume activities currently performed by the Office of the Patient Advocate (OPA), including producing consumer education and information guides, issuing health plan quality of care report cards, and advising and assisting enrollees related to the health care grievance system. f) Track and analyze consumer complaints. g) Develop protocols and procedures for resolution of complaints, and establish responsibility or referral as appropriate with regard to a variety of state and federal AB 922 Page 2 health care programs. 1)Requires a number of state entities to submit data to OHCA regarding consumer complaints. These agencies include the Department of Managed Health Care (DMHC), the Department of Insurance (CDI), the Department of Health Care Services (DHCS), the Managed Risk Medical Insurance Program (MRMIB), the Department of Public Health (DPH), and the newly established California Health Benefit Exchange. 2)Permits OHCA to contract with community-based consumer assistance organizations to assist in some or all of the above, subject to certain requirements. 3)Requires OHCA to apply to HHS for grant funding and authorizes OHCA to seek outreach funding through Medicaid and Children's Health Insurance Program (Healthy Families). 4)Creates the California Health Consumer Assistance Trust Fund in the State Treasury, and requires moneys in the fund to be made available for the purpose of this bill upon appropriation by the Legislature. 5)Repeals existing law which establishes the Office of Patient Advocate (OPA), and requires funds allocated to support the OPA to be transferred to the California Health Consumer Assistance Trust Fund. FISCAL EFFECT 1)One-time state costs to establish the OHCA, not likely to exceed $1 million. 2)Ongoing cost pressure to fund the office, likely in the range of several million dollars annually. This estimate is subject to uncertainty and could exceed this amount. Costs would depend on several factors, including: a) The extent to which the office is marketed to consumers. b) The extent to which the OHCA depends on referrals to existing entities, or directly intervenes on behalf of consumers, to resolve consumer complaints and issues. c) The extent of the assistance offered to consumers with AB 922 Page 3 respect to enrolling in health plans. d) The extent to which individuals have problems accessing federal premium tax credits. e) Other unforeseen factors related to the implementation of health care reform in the state. 3)Unknown potential increased costs to existing and local state entities that provide complaint resolution and consumer assistance services, to the extent interaction with the OHCA increases the number of referrals to these entities. These entities include: a) The Help Center administered by the Department of Managed Health Care. b) The Consumer Hotline administered by the Department of Insurance. c) The Medi-Cal Managed Care Office of the Ombudsman. 4)Unknown, potentially significant costs to state entities including DMHC, CDI, DHCS, MRMIB, DPH, and the Exchange to collect and submit specific data regarding consumer complaints to OHCA. Costs would depend on the required degree of standardization of complaint data, how the new requirements compare with the existing data collected, and whether a new information technology system was required to collect and transmit data. 5)This bill provides that approximately $2.3 million in special funds currently allocated annually to support the Office of the Patient Advocate (OPA) shall be transferred to a newly created California Health Consumer Assistance Trust Fund to offset the costs of this bill. As this bill requires the OHCA to perform duties exceeding the current duties of the OPA, this amount would be inadequate to fully fund the new office. As noted above, the bill also authorizes the OHCA to apply for grant funding. To the extent additional funding is not secured through grants, there would be GF cost pressure to fund the duties to OHCA imposed by this bill that exceed the current duties of the OPA. AB 922 Page 4 COMMENTS 1)Rationale . According to the author, this bill establishes the OHCA in state government to position California to receive federal monies made available by the federal Patient Protection and Affordable Care Act (PPACA) for the purpose of establishing and operating such an office. The author states California currently has a fragmented system for consumer assistance with health care coverage complaints. The author argues it is imperative that Californians be provided with a single source of correct and current information on PPACA, and that the OHCA will also provide for much needed, clear and understandable consumer information and assistance. 2)Multiple Sources of Consumer Assistance . Currently, a variety of community-based organizations and governmental organization assist consumers with health care eligibility, enrollment, coverage, and access to services. Many consumers may not know what their coverage options are, while others who have coverage may not know who to contact with a complaint. Consumer advocates argue that individuals should not have to struggle to determine regulatory jurisdiction if they have a complaint. This bill seeks to provide a single entity to coordinate information and consumer services related to health care. 3)Funding Available for Consumer Assistance . This bill authorizes the new office to apply for several federal grants. The Patient Protection and Affordable Care Act (PPACA) calls for HHS to provide grants to states to establish and operate independent offices of health insurance consumer assistance or health insurance ombudsman programs. The PPACA makes $30 million available in the first fiscal year for health insurance consumer assistance or health insurance ombudsman programs, with additional funding planned for later years. As a condition of receiving a grant, a state must collect and report to HHS data on the types of problems and inquiries encountered by consumers. To date, the state Department of Managed Health Care and the California Department of Insurance have received $3 million total funding for these activities. In addition, federal law makes available outreach funding for Medicaid and the Children's Health Insurance Program (Healthy Families in California). AB 922 Page 5 4)Related Legislation . AB 2787 (Monning) of 2010 established the Office of the California Health Ombudsman, governed by a chief executive officer known as the California Health Ombudsman, and required the Ombudsman to educate consumers on their health care coverage rights and responsibilities, assist consumers with enrollment in health care coverage, and resolve problems with obtaining federal premium tax credits. AB 2787 was held on suspense in the Senate Appropriations Committee. Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081