BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 922
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          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 








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               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
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               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. 








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           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
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            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