BILL ANALYSIS Ó
SB 770
Page 1
Date of Hearing: August 25, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 770 (Steinberg and Evans) - As Amended: August 16, 2011
Policy Committee: N/A Vote:N/A
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill requires health insurance plans and health care
service plans to provide coverage for behavioral health
treatment for pervasive developmental disorder or autism
(PDD/A). Specifically, this bill:
1)Requires health care service plans and health insurers to
maintain an adequate network of qualified autism service
providers (QASP), and defines this term to include unlicensed
providers that are supervised by licensed providers.
2)Does not require benefits that exceed the essential health
benefits to be defined by the federal Health and Human
Services Agency pursuant to the federal Patient Protection and
Affordable Care Act (ACA).
3)States the bill is not to be construed as reducing any
obligation to provide services to an individual through
current programs, including regional centers, community mental
health programs, early intervention programs, and schools.
4)Defines behavioral health treatment as evidence-based
treatment prescribed by a licensed physician and surgeon and
provided by a QASP.
5)Makes various legislative findings and declarations regarding
the effectiveness of behavioral health treatment for PDD/A.
FISCAL EFFECT
A California Health Benefits Review Program (CHBRP) analysis of
a similar bill, SB 166 (Steinberg, 2011) identified the
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following fiscal impact:
1)Annual costs of $46 million
a) CalPERS, $9 million (32% General Fund);
b) MRMIB plans (Healthy Families Program, Access for
Infants and Mothers, and the Major Risk Medical Insurance
Program), $37 million (about 35% General Fund).
1)Annual increased premium costs in the private insurance market
of $177 million. These costs reflect increased premiums by
employers for group insurance, premiums paid in the individual
health insurance market, and premium costs borne by
individuals with group coverage.
2)Significant GF cost savings, conservatively in the tens of
millions of dollars. CHBRP reports $146 million in cost
savings to current payers of PDD/A-related services, which are
primarily school districts and the state Department of
Developmental Services (DDS). Given data limitations, it is
difficult to estimate precisely where cost savings would
accrue.
a) Assuming 50% of the savings accrue to DDS, GF savings
would be in the range of $40-$50 million. Savings would
partially depend on the success of DDS in identifying other
payers.
b) Cost savings to school districts would not result in
direct GF savings if K-12 education was funded at the
minimum amount required by Proposition 98. However, any
funds saved by school districts due to a reduction in
expenditures for ASD-related services could be redirected
to other activities.
Because the analysis of SB 166 assumed that behavioral
health services would be delivered by licensed providers,
while SB 770 stipulates that unlicensed providers can
deliver services, the costs may be slightly less than
estimated here.
COMMENTS
1)Rationale . According to the author, SB 770 provides clarity
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in the law by mandating that health plans and insurers cover
behavioral health treatment, such as Applied Behavioral
Analysis (ABA), for those with autism. The author also states
the bill defines the scope of these treatments and eliminates
unwarranted restrictions on those who are qualified to provide
the treatment. The author contends this clarification will
save struggling families from the bureaucratic hurdles many
face in getting this treatment covered by health plans and
insurers.
2)Mental Health Parity . Under current law, California has had
partial mental health parity for specified conditions since AB
88 (Thompson), Chapter 524, Statutes of 1999. AB 88 requires
treatment parity for serious mental illness (SMI) such as
schizophrenia, autism, and anorexia nervosa. This bill would
further specify that behavioral health treatment for pervasive
developmental disorder or autism (PDD/A) must be covered.
3)Applied Behavioral Analysis . CHBRP's analysis indicates that a
similar bill would result in significant increases in
behavioral health treatments for PDD/A. Because the largest
impact would be an increase in applied behavioral analysis
(ABA) and similar services, CHBRP's analysis and this analysis
focus on ABA. ABA is the process of systematically applying
interventions based upon the principles of learning theory to
improve socially significant behaviors to a meaningful degree.
Socially significant behaviors include reading, academics,
social skills, communication, and adaptive living skills like
motor skills, eating and food preparation, personal self-care,
domestic skills, home and community orientation, and work
skills.
ABA requires intensive treatments of more than 25 hours each
week and costs about $50,000 each year. Consumers complain
about the refusal of health care service plans to cover ABA
services. Some independent medical reviews (IMRs) of health
plan coverage denials for ABA services for children diagnosed
with autism have overturned the health plan's decision to deny
coverage, while others have not.
4)Effectiveness of ABA . CHBRP indicates that the literature on
the effectiveness of behavioral intervention therapies (BIT),
of which ABA is the most popular, is difficult to synthesize
since most studies compared intensive behavioral intervention
therapies of differing duration and intensity or compared
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interventions based on different theories of behavior. Thus,
most studies of intensive behavioral intervention therapy
cannot determine whether BIT improves outcomes relative to no
treatment; they can only determine whether some form of BIT is
more effective than others.
CHBRP notes that even this question is difficult to answer
because the characteristics of treatments provided to both
intervention and comparison groups vary widely across studies.
Additionally, CHBRP states that many studies of BIT do not
assess outcomes over sufficiently long periods of time to
determine whether use of these therapies is associated with
long-term benefits.
In conclusion, CHBRP indicates there is some support that BIT,
including ABA, can improve IQ and adaptive behavior as
compared to other types of treatment. However, the increases
in IQ were not sufficiently large to enable the children to
achieve levels of intellectual and educational functioning
similar to their peers without PDD/A.
5)Current Enforcement Action and Litigation Over Coverage of
ABA . Health plan coverage of ABA is an area of significant
ongoing disagreement between health plans and insurers and
their regulatory oversight agencies, the Department of Managed
Health Care (DMHC) and the California Department of Insurance
(CDI). The areas of disagreement are many: whether ABA is a
medical service, whether it is required to be covered under
current mental health parity law, whether it must be provided
by licensed providers, whether coverage limitations are legal,
and whether an IMR of the medical necessity of ABA is
appropriate when it is not considered by the health plan to be
a covered benefit. Health plans regulated by DMHC indicate
they currently provide comprehensive coverage for
autism-related medical services, including diagnosis,
assessment, medication and speech, physical, rehabilitative
and occupational therapies.
In recent years, a more aggressive regulatory stance from
these two agencies, based upon their interpretation that
California's mental health parity laws require coverage of
ABA, has led to enforcement action by CDI against Blue Shield.
An action brought against Blue Shield earlier this year is
pending hearing in January 2012, and CDI reports there is one
additional enforcement action pending related to failure to
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cover ABA. It has also led to settlements in July 2011
between DMHC and Anthem Blue Cross and Blue Shield, which were
signed in order to avoid enforcement action. The settlements
require limited coverage of ABA by licensed providers, or
providers supervised by licensed providers. Autism advocates
argue that these settlements unduly relieve plans from prior
violations of the Knox-Keene Act that governs health plan
coverage, and do not go far enough to make coverage accessible
to children diagnosed with PDD/A.
Also, in a January 2011 Los Angeles County Superior Court
ruling, a judge affirmed DMHC's position that providers of ABA
must be licensed by the state, a position that autism
advocates still dispute. In May of this year, the California
Association of Health Plans (CAHP) filed suit against DMHC in
Sacramento County Superior Court, seeking a summary judgment
resolving several issues related to DMHC's authority to
require health plans to cover ABA. CAHP indicates that a
decision may be reached as soon as this week.
6)Other Payers of ABA Services . In California, a number of
entities pay for or directly provide ABA services, including
school districts, the state Department of Developmental
Services, and individuals, as well as health care and health
insurance plans. As indicated above, CHBRP reports in their
analysis of a similar bill that increased premium costs in
public and private programs are offset by reductions in
expenditures by individuals and other payers on newly covered
benefits (such as behavioral intervention therapy (BIT)
services) of $146 million.
7)Mandates and the Affordable Care Act (ACA) . The ACA creates
new state-run health insurance exchanges that will likely
provide coverage to millions of Californians, and requires
that health plans offered through an exchange cover certain
categories of benefits, called Essential Health Benefits
(EHBs). The Secretary of Health and Human Services (HSS) is
expected to publish guidance later in 2011 and in 2012 that
will further define these categories. These definitions will
have important fiscal implications for the state. The ACA
specifies that if states require plans in the exchange to
offer additional benefits that go beyond the defined EHBs,
then states must pay the additional cost related to those
mandates.
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At this time, there are a number of outstanding questions
related to how federally defined EHBs will interact with
state-level benefit mandates. CHBRP indicates that EHBs
explicitly include "mental health and substance abuse disorder
services, including behavioral health treatment" as well as
"rehabilitative and habilitative services and benefits." It is
unknown whether the mandate in SB 770 would go beyond what
will be included in federally defined EHBs, but it is
plausible that EHBs may not mandate coverage of ABA.
To mitigate potential fiscal concerns, SB 770 does not mandate
benefits beyond those defined as EHBs. Thus, it is unlikely
that there would be an additional fiscal liability to the
state as a result of this mandate for qualified health plans
offered in the Exchange, because the state-mandated
requirement to cover ABA would be triggered off if EHBs do not
require ABA to be covered. However, if the requirement were
triggered off, children both inside and outside the Exchange
could lose coverage beginning in 2014, raising potential
policy issues related to disruption of treatment and the
requirement for plans to maintain a provider network for
services that are no longer covered.
8)Related Legislation . SB 166 (Steinberg) requires health plans
and insurers to cover behavioral intervention therapy as a
treatment for autism. SB 166 was held in the Senate Health
Committee.
AB 171 (Beall) is similar to, though slightly more expansive
than, SB 166 and SB 770. AB 171 requires health insurance
plans and health care service plans to provide coverage for
screening, diagnosis, and treatment services associated with
autism spectrum disorders (ASDs), and defines certain types of
services that must be covered to treat ASDs. AB 171 is
pending on the Suspense File of this committee.
AB 1205 (Berryhill) requires the Board of Behavioral Sciences
(BBS) to license behavioral analysts (BA) and assistant BAs.
AB 1205 was held on the Suspense File of this committee.
Other Health Mandates in the Current Session. There were 15
health mandates proposed for legislative consideration this
year, including SB 770. Some have since been amended into
another subject matter. Other proposed health mandates
include:
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a) AB 72 (Eng): Acupuncture
b) AB 137 (Portantino): Mammography
c) AB 154 (Beall): Mental Health Services
d) AB 171 (Beall): Behavioral Intervention Therapy
e) AB 185 (Hernandez): Maternity Services
f) AB 310 (Ma): Prescription Drugs
g) AB 369 (Huffman): Pain Prescriptions
h) AB 428 (Portantino): Fertility Preservation
i) AB 652 (Mitchell): Child Health Assessments
j) AB 1000 (Perea): Cancer Treatment
aa) SB 136 (Yee): Tobacco Cessation
bb) SB 155 (Evans): Maternity Services
cc) SB 166 (Steinberg): Behavioral Intervention Therapy
dd) SB 173 (Simitian): Mammograms
ee) SB 255 (Pavley): Breast Cancer
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081