BILL ANALYSIS Ó SENATE HEALTH COMMITTEE ANALYSIS Senator Ed Hernandez, O.D., Chair BILL NO: AB 922 A AUTHOR: Monning B AMENDED: June 20, 2011 HEARING DATE: June 29, 2011 9 CONSULTANT: 2 Chan-Sawin 2 SUBJECT Office of Patient Advocate SUMMARY Transfers the Office of the Patient Advocate (OPA) from the Department of Managed Health Care (DMHC) to operate as an independent entity within state government. Requires existing OPA duties to apply to health insurers regulated by the California Department of Insurance (CDI) and their insureds (in addition to DMHC-regulated health plans) and assigns new duties to the OPA consistent with requirements of the Patient Protection and Affordable Care Act (PPACA). CHANGES TO EXISTING LAW Existing federal law: Requires, under PPACA (Public Law 111-148), as amended by the Health Care Education and Reconciliation Act of 2010 (Public Law 111-152), each state, by January 1, 2014, to establish an American Health Benefit Exchange that makes qualified health insurance products available to qualified individuals and qualified employers. If a state does not establish an Exchange, the federal government administers Continued--- STAFF ANALYSIS OF ASSEMBLY BILL 922 (Monning) Page 2 the Exchange. Requires the federal Secretary of Health and Human Services Agency to award grants to states to enable states (or the exchanges operating in such states) to establish, expand, or provide support for offices of health insurance consumer assistance or health insurance ombudsman programs. Establishes criteria for states to meet in order to receive a consumer assistance grant under the PPACA, and requires the ombudsman to perform certain activities, including assisting with the filing of complaints and appeals, educating consumers on their rights and responsibilities, assisting consumers with enrollment, and resolving problems in obtaining premium tax credits made available by PPACA. As a condition of receiving a federal ombudsman grant, an office of health insurance consumer assistance or ombudsman program is required to collect and report data to the Secretary of HHS on the types of problems and inquiries encountered by consumers. Existing state law: Provides for the regulation of health plans by DMHC under the Knox-Keene Health Care Service Plan Act of 1975, and for the regulation of health insurers by the CDI, under provisions of the Insurance Code (collectively referred to as regulators). Requires DMHC to establish and maintain a toll-free telephone number for the purpose of receiving complaints regarding health plans regulated by DMHC. Establishes the Office of Patient Advocate (OPA) within DMHC to represent the interests of enrollees served by health plans regulated by DMHC and establishes, as the goal of OPA, to help enrollees secure health care services to which they are entitled under the laws administered by DMHC. Requires OPA to compile an annual publication, to be made available on DMHC's website, of a quality-of-care report card, including, but not limited to, health plans. Requires the Insurance Commissioner to establish a program to investigate complaints, respond to inquiries, and to bring enforcement actions regarding health insurers. Requires the program to include, but not be limited to, a STAFF ANALYSIS OF ASSEMBLY BILL 922 (Monning) Page 3 toll-free telephone number dedicated to the handling of complaints and inquiries, public service announcements to inform consumers of the toll-free telephone number, information as to how to register a complaint or make an inquiry to the CDI, and a simple, standardized complaint form designed to assure that complaints will be properly registered and tracked. Establishes the Medi-Cal program, which is administered by the State Department of Health Care Services (DHCS), under which qualified low-income individuals receive health care services. Authorizes DHCS, for purposes of the Medi-Cal Program, on a regional pilot project basis, to the extent authorized by law, to enter into contracts with one or more nonprofit organizations to perform the functions of the DHCS' Office of the Ombudsman. Establishes and specifies the duties and authority the California Health Benefit Exchange (Exchange) within state government in a manner that is consistent with PPACA. Establishes the Managed Care Fund and the Insurance Fund, for the purposes of funding the regulatory activities of DMHC and CDI, respectively. This bill: Transfers the OPA from DMHC, and establishes it as an independent entity within state government. Requires existing OPA duties to also apply to health insurers regulated by CDI and their insureds (in addition to DMHC-regulated health plans). Requires the OPA to be headed by a patient advocate who is appointed by the Governor and who serves at the pleasure of the Governor. Specifies that the duties of the OPA include, but are not limited to: Developing educational and informational guides for consumers describing their rights and STAFF ANALYSIS OF ASSEMBLY BILL 922 (Monning) Page 4 responsibilities, and informing them of effective ways to exercise their rights to secure health coverage, as specified; Compiling an annual publication, to be made available on the office's website, containing a quality of care report card, as specified; Rendering advice and direct assistance to consumers regarding: a. Filing of complaints, grievances, and appeals, including appeals of denials of care, as specified, with the appropriate regulator or public program; b. Problems related to health care services, including care and service problems, and claims or payment problems, as specified; Advising consumers on problems related to mental health parity and coverage for substance abuse treatment, consistent with state and federal law, as specified; Making referrals to the appropriate state agency regarding studies, investigations, audits, or enforcement that may be appropriate to protect the interests of consumers; and, Coordinating and working with other government and nongovernment patient assistance programs and health care ombudsman programs. Requires the OPA to employ necessary staff, and authorizes OPA to employ or contract with experts when necessary to carry out the functions of the office. Requires the patient advocate to make annual budget requests for the office, which shall be identified in the annual budget act. Requires the OPA to have access to records of DMHC and CDI, as specified. Requires the OPA to annually issue a public report on the activities of the office, and to appear before the appropriate legislative policy and fiscal committees, if requested, to report and make recommendations on the activities of the office. Directs the OPA to also do all of the following: Provide outreach and education about health care coverage options including, but not limited to, STAFF ANALYSIS OF ASSEMBLY BILL 922 (Monning) Page 5 information regarding the cost of coverage and education about how to navigate the health care arena, including what health services a carrier offers or provides, how to select a plan or insurer, and how to find a doctor or other health care provider. Advise and assist consumers regarding eligibility for coverage, including enrollment in, retention in, and transitions between, coverage programs by providing information, referral, and direct application assistance for all types of payors, including public programs such as Medi-Cal, HFP, Medicare, private individual coverage, employer-sponsored coverage, Employee Retirement Income Security Act (ERISA) plans, charity care, unsubsidized Exchange coverage, and Exchange coverage with tax subsidies and/or tax credits. Advise and assist consumers to resolve problems with obtaining federal premium tax credits. Operate a HealthHelp toll-free telephone hotline that can route callers to the proper regulator, public program, carrier, or consumer assistance program in their area and provide interpreters for limited English proficiency callers. Operate a HealthHelp website, other social media, and up-to-date communication systems to provide public information regarding consumer assistance programs. Requires the OPA to collect, track, quantify, analyze, and publicly report on problems, inquiries, and complaints encountered by consumers, including, but not limited to, the complaints reported to health consumer assistance organizations and agencies, according to the nature and resolution of the complaints and, including, but not limited to, information by carrier, type of coverage program, timeliness of resolution, health status, age, race, ethnicity, language, geographic region, gender, gender identity/expression, or sexual orientation of the complainants in order to identify the most common types of problems and the problems faced by particular populations, including any health disparity population, as specified. Requires the OPA to publicly report its analyses of these problems and inquiries at least quarterly on its website and to collect and report data to the United States Secretary of Health and Human Services (HHS) on the categories of populations, as specified. STAFF ANALYSIS OF ASSEMBLY BILL 922 (Monning) Page 6 Requires the OPA, in analyzing and reporting complaints, to take into account the number of individuals enrolled by each carrier and in each coverage program. Permits the OPA to contract with community-based consumer assistance organizations to assist in any or all of its duties, as specified. Requires these programs to have, as their primary mission, the assistance of health care consumers, and other specified experience. Further requires these programs to qualify as "navigators" under the Exchange, as specified. Requires the OPA to develop protocols, procedures, and training modules and to implement and oversee a training program for contracted organizations with continuing education components. Also requires the OPA to adopt standards for contracted organizations regarding confidentiality and conduct. Authorizes OPA to revoke the contract of organizations that violate these standards, as specified. Authorizes the OPA to contract with consumer assistance programs to develop a series of appropriate literacy level and culturally and linguistically appropriate educational materials in all threshold languages for consumers regarding health care coverage options and how to resolve problems. Requires these materials to be made available to all consumer assistance programs and on the OPA website. Requires the OPA to develop protocols and procedures for the resolution of consumer complaints and the establishment of responsibility or referral, as appropriate, to the appropriate public program or regulator. Requires DMHC, CDI, DHCS, MRMIB, the Department of Public Health (DPH), and the Exchange to report data and other information to the OPA regarding consumer complaints submitted to those agencies, as specified. Also requires this information to be reported according to the particular carrier involved. Creates the OPA Trust Fund in the State Treasury, and upon appropriation by the Legislature, requires moneys in the fund to be made available for implementing the provisions STAFF ANALYSIS OF ASSEMBLY BILL 922 (Monning) Page 7 of this bill. Directs the OPA to establish and maintain a prudent reserve. Requires funding for the actual and necessary expenses of the OPA to be provided, subject to appropriation by the Legislature, from the Managed Care Fund and the Insurance Fund, as specified. Requires the OPA to apply to HHS for a grant, as specified. Permits OPA to apply for other federal grants, and to the extent permitted by federal law, to seek federal funding for assisting beneficiaries of the Medi-Cal Program. FISCAL IMPACT According to the Assembly Appropriations Committee analysis: 1)One-time state costs to expand the OPA, not likely to exceed $1 million. 2)Ongoing increased special fund/federal fund costs to fund the increased workload, likely in the range of several million dollars annually. This estimate is subject to uncertainty and the actual cost could exceed this amount. The bill specifies that funding is to be provided through federal grant funding as well as fee revenue from existing regulatory fees paid by carriers. 3)Unknown potential increased costs to existing local and state entities that provide complaint resolution and consumer assistance services, to the extent interaction with the OPA increases the number of referrals to these entities. 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 the OPA. BACKGROUND AND DISCUSSION According to the author, California currently has a fragmented system for consumer assistance with health care STAFF ANALYSIS OF ASSEMBLY BILL 922 (Monning) Page 8 coverage complaints. There are eight governmental entities and several private, nonprofit entities that provide a number of services for assistance with public and private health care coverage. These services include advice on coverage options, education about how to navigate the system, assistance with complaints and grievances, assistance in choosing a health plan and finding a provider. These entities also respond to complaints about, among other things, eligibility, coverage of services, and timely access to providers. The author asserts that the coverage provisions and insurance requirements in PPACA are complex and have varying effective dates, which could lead to consumer confusion. The author believes that it is imperative that Californians be provided with a single source of correct and current information. In addition to information about coverage options, California health care consumers need help when they have problems with their health coverage, including care denials, coverage terminations and billing problems. The author also states that, given California's diverse population, assistance needs to be provided in multiple languages, but acknowledges that, in the present fiscal crisis climate, there are no new state funds that could be used for this purpose. Therefore, the author asserts that California must consolidate and coordinate existing consumer assistance programs and combine funding sources for more efficient use of funds. The author states that AB 922 establishes the OPA independently in state government to position California to receive further federal grant monies made available through PPACA for consumer assistance, and provides for more clear and understandable consumer assistance by expanding and strengthening current programs operating at the local level. The OPA would also collect and compile data about consumers' problems, allowing an important window into the types of health care problems Californians face. Patient assistance provisions in federal health reform On March 23, 2010, President Obama signed PPACA. It is estimated that 4.7 million California children and adults who were uninsured during some part of 2009 will be eligible for health coverage under PPACA. Among other provisions, the new law makes statutory changes affecting STAFF ANALYSIS OF ASSEMBLY BILL 922 (Monning) Page 9 the regulation of and payment for certain types of private health insurance. The law also significantly expands health care coverage to currently uninsured individuals through public program expansions, a mandate to purchase coverage, a temporary high-risk pool program, and by requiring guaranteed issue of coverage. It is anticipated that millions of currently uninsured persons in California will obtain coverage under the provisions of PPACA. PPACA also contains provisions to provide funding for states to establish health insurance consumer assistance programs. In order to be eligible to receive a grant, states are required to designate an independent office of health insurance consumer assistance that, directly or in coordination with state health insurance regulators and consumer assistance organizations, receives and responds to inquiries and complaints concerning federal and state health insurance requirements. DMHC, in partnership with the OPA, has been awarded $3.4 million to: Develop and promote a coordinated, consumer-friendly website and corresponding toll-free number that consumers can call with questions about health care coverage, and to receive assistance with the filing of complaints and appeals. Conduct a statewide media campaign to educate consumers about their rights and responsibilities, and to provide assistance with enrollment in group health plans or health insurance coverage. Evaluate the effectiveness of the initiatives, and track and quantify consumer problems and inquiries, for reporting to state and federal policymakers. Implementation of the PPACA will lead to millions of more Californians enrolled in coverage, including expansions of public programs. Consumers will also have expanded choices of coverage and different options to use, should they lose a source of job-based coverage, have a child, divorce, or have an increase in income. All of these changes will affect eligibility, making it all the more necessary to establish one entity to help them with their health coverage. STAFF ANALYSIS OF ASSEMBLY BILL 922 (Monning) Page 10 California's current system of consumer assistance California currently has a fragmented system for consumer assistance with health care coverage complaints. Entities that provide services for assistance with public and private health care coverage include: Government Entities: HMO HelpLine, Medi-Cal Managed Care (MCMC) Ombudsman, CDI Consumer Hotline (applies to all types of insurance) Department of Labor, the Employee Benefits Security Administration (EBSA), 1-800-Medicare, county welfare offices, the OPA, and the Exchange (forthcoming); Nonprofit Entities: Health Consumer Alliance (HCA), Health Insurance Counseling and Advocacy Program (HICAP), and Certified Application Assistors (CAAs). These services include advice on coverage options, education about how to navigate the system, assistance with complaints and grievances, and assistance in choosing a carrier and finding a provider. These entities also respond to complaints about, among other things, eligibility, coverage of services, and timely access to providers. Community-based consumer assistance programs There are a number of community-based organizations in California that provide assistance to health care consumers. The HCA helps low-income Californians in 13 counties. Each health consumer center runs a hotline to assist consumers by telephone and provides in-person visits as well as outstationed services in hospitals, courts, or farm fields. Consumers can also email an office for assistance. The HCA helps consumers regardless of their type of coverage. The HCA programs provide a range of types of services including advice and referrals to the consumer, assisting with communication between the consumer and a health care entity by conducting a conference call or calling on behalf of the consumer and clarifying coverage, plan or provider policies; and providing direct representation in health plan appeals, administrative fair hearings and other adjudications. The HCA collects data about the types of problems faced by the thousands of health care consumers they help each year. Based on this data, the HCA can identify systemic problems faced by consumers. STAFF ANALYSIS OF ASSEMBLY BILL 922 (Monning) Page 11 HICAP provides free and objective information and counseling about Medicare. Volunteer counselors help Medicare beneficiaries understand their rights and health care options. HICAP also offers free educational presentations to groups of Medicare beneficiaries, their families and/or providers on a variety of Medicare and other health insurance-related topics. CAAs are placed in community settings to help families complete and submit the joint HFP/Medi-Cal application. These community-based entities play a crucial role in providing information to thousands of Californians (primarily low income, many with LEP) about health coverage options and helping them to get enrolled and properly use their insurance coverage. CAAs are trained and certified by MRMIB to help Californians understand their coverage options and enroll in health coverage. CAAs are often bilingual, come from the communities they serve, and can be employed by Federally Qualified Health Centers, Rural Health Centers, regional nonprofit organizations, and schools, etc. Throughout California, these entities have developed strong and trusting relationships within their communities and are valued by local families needing information about health coverage. Related legislation SB 615 (Calderon) requires, on and after January 1, 2013, solicitors and solicitor firms, and principal persons engaged in the supervision of solicitation for health care service plan contracts to complete specified training, and requires the Insurance Commissioner's (Commissioner) curriculum board to make recommendations to the Commissioner for the instruction of accident and health agents about the requirements imposed by PPACA. Pending hearing in Assembly Health Committee. AB 736 (Calderon), among other things, would have authorized a person licensed to transact accident and health insurance to be an agent, a broker, or both, and would have removed the restriction that a life licensee only be a life agent. Held on suspense in Assembly Appropriations Committee. Prior legislation SB 900 (Alquist), Chapter 659, Statutes of 2010, STAFF ANALYSIS OF ASSEMBLY BILL 922 (Monning) Page 12 establishes the California Health Benefit Exchange as an independent public entity within state government. Requires the Exchange to be governed by a board composed of the Secretary of California Health and Human Services, or his or her designee, and four other members appointed by the Governor and the Legislature who meet specified criteria. AB 1602 (J. Perez), Chapter 655, Statutes of 2010, specifies the powers and duties of the Exchange relative to determining eligibility for enrollment in the Exchange and arranging for coverage under qualified health plans. Requires the Exchange to provide health plan products in all five of the federal benefit levels (platinum, gold, silver, bronze and catastrophic). Requires health plans participating in the Exchange to sell at least one product in all five benefit levels in the Exchange, and to sell their Exchange products outside of the Exchange. Requires health plans that do not participate in the Exchange to sell at least one standardized product designated by the Exchange in each of the four levels of coverage, if the Exchange elects to standardize products. AB 2787 (Monning) of 2010 would have established the Office of the California Health Ombudsman, governed by a chief executive officer known as the California Health Ombudsman, and would have 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. Held on suspense in the Senate Appropriations Committee. AB 51 (Dymally) of 2006 would have required the OPA to include in its annual health plan report card information on quality of care and access provided by Medicare prescription drug plans. Failed passage out of Assembly Appropriations Committee. AB 2170 (Chan) of 2006 was substantively similar to AB 51 (Dymally). Vetoed. Arguments in support Health Access California (HAC), a cosponsor of this bill, writes that enactment of federal health reform means that STAFF ANALYSIS OF ASSEMBLY BILL 922 (Monning) Page 13 virtually every Californian will have access to quality, affordable health care. Existing programs, including the HMOHelp Line, have done much of what is contemplated in this bill, but not all. HAC contends a state-level ombudsman who serves as the first line of triage for consumer complaints, while leaving the respective regulators and sources of coverage the responsibility for resolving specific complaints and grievances, is necessary. HAC asserts that this bill will result in a robust response to grievances and complaints about the health care system. Western Center on Law & Poverty (WCLP), also a cosponsor, writes that uninsured persons have different needs than those who are consistently covered. This includes people who primarily speak a language other than English, those who have never navigated a health insurance plan, and those who have never consistently seen a health care provider. For all those reasons, WCLP states that Californians need a centralized hub when dealing with questions or problems with their coverage. WCLP argues that AB 922 leverages existing consumer assistance programs by allowing OPA to contract with community based organizations that already provide consumer assistance services, many of which are experts in public programs, while ensuring that the most qualified organizations can assist consumers in community-based settings in a linguistically and culturally appropriate manner. WCLP asserts that this "hub-and-spokes" approach has been effective in states like New York, which allows one nonprofit organization to coordinate with other community organizations to assist health consumers. Consumers Union argues that AB 922 positions California to maximize federal funds for ombudsman and consumer navigation services, which is critically important to have in place well in advance of the mandate for individual coverage that takes effect in 2014. The American Federation of State, County and Municipal Employees states that this bill would greatly facilitate California's ability to comply and cope with federal health reform, and that the state cannot offer its residents adequate assistance in this matter currently. The 100% Campaign, PICO California and the California STAFF ANALYSIS OF ASSEMBLY BILL 922 (Monning) Page 14 Coverage & Health Initiatives state that California has more than seven million uninsured persons, including over one million children, yet there is no one single place for families to obtain clear and concise information and support. This bill not only builds toward future implementation of PPACA, it provides a needed network to reach out to hundreds of thousands of children who are currently uninsured but eligible for California's public program coverage. The California Optometric Association writes in support, stating that OPA will provide a "one-stop-shop" that consolidates the existing fragmented system into one office to provide clear, concise and up-to-date information to consumers. The California Chiropractic Association (CCA) believes that it is essential to provide consumers support in making coverage choices and for consumer coverage complaints. By operating as an independent state entity, CCA believes that OPA will synthesize a fragmented health care information coverage, outreach and complaint system. Arguments in support if amended The California Association Marriage and Family Therapists raises concerns that the bill does not expressly include mental health coverage as one of the areas that OPA will be able to answer questions about and resolve problems with. Arguments in opposition The California Association of Health Plans (CAHP) opposes AB 922 on the grounds that California already has consumer advocacy programs under each regulator that are funded by the industry through assessments and taxes that cost the industry and its consumers millions of dollars. CAHP states that this new entity does not provide any order to the myriad of assistance programs currently available to consumers, and instead adds a new layer of government bureaucracy designed largely to forward calls back to the regulator. CAHP supports consolidation of existing consumer related functions, and argues that consolidation could lead to more uniformity and clarity for consumers. The Association of California Life and Health Insurance Companies (ACLHIC) concurs with CAHP, and argues that AB 922 has the potential to increase the cost of health care by increasing the fees imposed on carriers. ACLHIC points STAFF ANALYSIS OF ASSEMBLY BILL 922 (Monning) Page 15 out that the industry currently funds consumer assistance programs at DMHC, OPA and CDI, and existing law requires carriers to include their respective regulator's consumer complaint number on claims forms, as well as other written notices that go out to enrollees and insureds. ACLHIC also asserts that there is no real evidence supporting the concept of adding an additional independent office for consumer assistance. The California Right to Life Committee (CRLC), Inc. writes that AB 922 advances the federal Patient Protection and Affordable Care Act when presently there are serious challenges to its constitutionality, and that it would be better public policy not to depend on federal tax dollars under these circumstances. CRLC also contends that this bill "is another attempt to promote family planning and abortion services to low-income persons and non-English speaking populations". PRIOR ACTIONS Assembly Health: 12- 6 Assembly Appropriations:12- 5 Assembly Floor: 51- 27 COMMENTS 1. Role of OPA. The author's intent is for the OPA to serve both a central switchboard function, and to provide direct consumer assistance for general and basic inquires, including assistance with filing grievances. The author may wish to clarify that the ultimate authority to handle and adjudicate grievances falls under the purview of DMHC, CDI or the agency or department responsible for the public program. 2. Suggested technical amendments: (a) On page 4, at the end of line 9 insert: "the Medicare program" (b) On page 4, line 32 replace "Web site" with "website" STAFF ANALYSIS OF ASSEMBLY BILL 922 (Monning) Page 16 (c) On page 6, line 7 insert between "all" and "telephonic,": "forms of communications including, but not limited to, mail" (d) On page 8, strike out lines 17-20 POSITIONS Support: Health Access California (co-sponsor) Western Center on Law and Poverty (co-sponsor) 100% Campaign American Federation of State, County and Municipal Employees Asian Pacific American Legal Center California Association of Marriage and Family Therapists (if amended) California Children's Health Initiatives California Chiropractic Association California Coalition for Mental Health California Coverage & Health Initiatives California Family Resource Association California Immigrant Policy Center California Optometric Association California Pan-Ethnic Health Network California Rural Legal Assistance Foundation Children Now Children's Defense Fund-California Children's Health Initiatives of Greater Los Angeles The Children's Partnership Congress of California Seniors Consumers Union First 5 Association of California Having Our Say Health Consumer Center Inland Empire United Way Maternal and Child Health Access Mental Health Association in California National Alliance on Mental Illness California National Association of Social Workers - California Chapter STAFF ANALYSIS OF ASSEMBLY BILL 922 (Monning) Page 17 National Health Law Program Neighborhood Legal Services of Los Angeles County PICO California SEIU California Unitarian Universalist Legislative Ministry Action Network, CA United Ways of California Youth Law Center Oppose:Association of California Life and Health Insurance Companies California Right to Life Committee, Inc. California Association of Health Plans -- END --