BILL ANALYSIS Ó SB 946 Page 1 Date of Hearing: September 7, 2011 ASSEMBLY COMMITTEE ON HEALTH William W. Monning, Chair SB 946 (Steinberg) - As Amended: September 6, 2011 SENATE VOTE : Not applicable SUBJECT : Health care coverage: mental illness: pervasive developmental disorder or autism: public health SUMMARY : Requires health plans and health insurance policies to cover behavioral health therapy (BHT) for pervasive developmental disorder or autism (PDD/A), requires plans and insurers to maintain adequate networks of autism service providers, establishes an Autism Advisory Task Force (Task Force) in the Department of Managed Health Care (DMHC), sunsets this bill's autism mandate provisions on July 1, 2014, and makes other technical changes to existing law regarding HIV reporting and mental health services payments. Specifically, this bill : 1)Requires every health plan contract that provides hospital, medical, or surgical coverage and health insurance policy issued, amended, or renewed on or after July 1, 2012, pursuant to California's mental health parity law, to provide coverage for BHT for PDD/A. 2)Requires the coverage to be provided in the same manner and to be subject to the same requirements as provided in California's mental health parity law. 3)Provides, notwithstanding 1) above, as of the date that proposed final rulemaking for essential health benefits (EHBs) is issued, that this bill does not require any benefits to be provided that exceed the EHBs that all health plans will be required by federal regulations to provide under the federal Patient Protection and Affordable Care and Education Reconciliation Act of 2010 (PPACA), as amended by the federal Health Care and Education Reconciliation Act of 2010. 4)Precludes this bill from affecting developmentally disabled and early intervention services for which an individual is eligible, as specified. 5)Precludes this bill from affecting or reducing any obligation SB 946 Page 2 to provide services under an individualized education program, an individualized service plan, or under the Individuals with Disabilities Education Act and its implementing regulations, as specified. 6)Requires every health plan and insurer subject to this bill to maintain an adequate network that includes qualified autism service providers who supervise and employ qualified autism service professionals or paraprofessionals who provide and administer BHT. Permits health plans and insurers to selectively contract with providers within these requirements. 7)Defines "PDD/A" as the same meaning in California's mental health parity law. 8)Defines "BHT" as professional services and treatment programs, including applied behavior analysis (ABA) and other behavior intervention programs, that develop or restore, to the maximum extent practicable, the functioning of an individual with PDD/A and that meet the following: a) Is prescribed by a licensed California physician and surgeon, or psychologist; b) Is provided under a treatment plan prescribed by a qualified autism service provider and administered by one of the following: i) A qualified autism service provider; ii) A qualified autism service professional supervised and employed by the qualified autism service provider; or, iii) A qualified autism service paraprofessional supervised and employed by a qualified autism service provider; and, c) The treatment plan, which must be reviewed no less than once every six months, as specified, has measurable goals over a specific timeline that is developed and approved by the qualified autism service provider for the specific patient being treated. 9)Defines a "qualified autism service provider" as either of the following: a) A person, entity, or group that is certified by a national entity, such as, but not limited to, the Behavior Analyst Certification Board, that is accredited by the National Commission for Certifying Agencies, and who designs, supervises, or provides treatment for PDD/A, SB 946 Page 3 provided the services are within the experience and competence of the person, entity, or group that is nationally certified; or, b) A person or entity licensed as a physician and surgeon, physical therapist, occupational therapist, psychologist, marriage and family therapist, educational psychologist, clinical social worker, professional clinical counselor, speech-language pathologist, or audiologist who designs, supervises, or provides treatment for PDD/A, provided the services are within the experience and competence of the licensee. 10)Defines a "qualified autism service professional" as an individual who provides behavioral health treatment, is employed and supervised by a qualified autism service provider, provides treatment pursuant to a treatment plan developed and approved by the qualified autism service provider, is a behavioral service provider approved as a vendor by a California regional center to provide services as an Associate Behavior Analyst, Behavior Analyst, Behavior Management Program, and has training and experience in providing services for PDD/A, as specified. 11)Defines a "qualified autism service paraprofessional" as an unlicensed and uncertified individual who is supervised and employed by a qualified autism service provider, provides treatment and implements services pursuant to a treatment plan, meets the criteria set forth in regulations, as specified, and has adequate education, training and experience, as certified by a qualified autism service provider. 12)Requires DMHC, in consultation with the California Department of Insurance (CDI), to convene a Task Force by February 1, 2012, in collaboration with other agencies, departments, advocates, autism experts, health plan representatives, other entities, and stakeholders that it deems appropriate. Requires the Task Force to develop recommendations regarding BHT that are medically necessary for the treatment of individuals with autism or pervasive developmental disorder, and at least the following: a) Interventions that have been scientifically validated and have demonstrated clinical efficacy; b) Interventions that have measurable treatment outcomes; c) Patient selection, monitoring, and duration of therapy; SB 946 Page 4 d) Qualifications, training and supervision of providers; and, e) Adequate networks of providers. 13)Requires the Task Force to also develop recommendations regarding the education, training and experience requirements that unlicensed individuals providing autism services must meet to secure a license from the State. 14)Requires DMHC to submit a report of the Task Force to the Governor, President pro Tem of the Senate, the Speaker of the Assembly, and the Senate and Assembly Committees on Health by December 31, 2012, on which date the Task Force ceases to exist. 15)Exempts from this bill a specialized health plan or health insurance policy that does not deliver mental health or behavioral health services to enrollees, or an accident only, specified disease, hospital indemnity, or Medicare supplement policy, a health plan contract or health insurance policy under Medi-Cal or Healthy Families, and a health care benefit plan or contract pursuant to the Public Employees' Retirement System. 16)Provides that nothing in this bill be construed to limit the obligation to provide services under California's mental health parity law. 17)Permits, notwithstanding any other provision of law, a health plan or health insurer to utilize case management, network providers, utilization review techniques, prior authorization, copayments, or other cost sharing. 18)Defines, for the purposes of Insurance Code provisions of this bill, "provider," "professional provider," "network provider," "mental health provider," and "mental health professional" to include the term "qualified autism service provider" as defined. 19)Sunsets the provisions of this bill on July 1, 2014. Provisions already analyzed 20)Authorizes the Department of Public Health to develop a form to be used to report cases of HIV infection to the local SB 946 Page 5 health department and permits the form to be implemented without promulgating new regulations. 21)Conforms state law to existing federal regulations and current practice of the Department of Mental Health (DMH) with regard to negotiated rates and incentive payments for the provision of Medi-Cal reimbursable community mental health services. EXISTING LAW : 1)Enacts, in federal law, the PPACA to, among other things, make statutory changes affecting the regulation of, and payment for, certain types of private health insurance. Includes the definition of EHBs that all qualified health plans must cover, at a minimum, with some exceptions. 2)Provides that the EHB package in 1) above will be determined by the federal Department of Health and Human Services (HHS) Secretary and must include, at a minimum, ambulatory patient services; emergency services; hospitalizations; mental health and substance abuse disorder services, including behavioral health; prescription drugs; and, rehabilitative and habilitative services and devices, among other things. 3)Establishes the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene) to regulate and license health plans and specialized health plans by the DMHC and provides for the regulation of health insurers by the CDI. 4)Requires every health plan contract or health insurance policy issued, amended, or renewed on or after July 1, 2000, that provides hospital, medical, or surgical coverage to provide coverage for the diagnosis and medically necessary treatment of severe mental illness (SMI) of a person of any age, and of serious emotional disturbances of a child, under the same terms and conditions applied to other medical conditions, as specified. 5)Establishes the California Legislative Blue Ribbon Commission on Autism, until November 30, 2008, to study and investigate the early identification and intervention of Autism Spectrum Disorders (ASDs), gaps in programs and services available to those with ASDs, and to make recommendations to address gaps in services. SB 946 Page 6 6)Requires the Department of Developmental Services (DDS) to develop procedures for the diagnosis of ASDs. FISCAL EFFECT : This bill has not yet been analyzed by a fiscal committee. COMMENTS : 1)PURPOSE OF THIS BILL . According to the author, the intent of this legislation is to ensure that therapeutic decisions for the medical treatment of ASD remain in the hands of physicians and other appropriate medical professionals. ASD is the fastest-growing serious developmental disability in the U.S. ASD is now more common than childhood cancer, juvenile diabetes, and pediatric AIDS combined. According to the author, although there is no cure for ASD, BHT is now widely accepted as an effective medical treatment for this disorder. Nevertheless many private health plans and health insurance companies deny BHT under the pretext that it is an educational service and therefore not a covered benefit . This administrative decision by the health plans precludes any review by physicians or other medical providers; thereby potentially withholding crucial medical services. The author believes this bill closes a dangerous loophole in the existing mental health parity law and ensures that healthcare decisions for the treatment of ASD are provided only by the appropriate medical professionals. According to the author, current California mental health parity law, AB 88 (Thomson), Chapter 534, Statutes of 1999, requires private health plans and health insurance companies to provide coverage for the medically necessary treatment of ASD. The author states that this bill establishes a definition and criteria for BHT that are consistent with established "best practices" and medical treatment standards, and that this bill simply requires coverage for BHT services that meet these standards and also establishes appropriate criteria for qualified BHT providers. The author believes questions of medical necessity, experimental interventions, and other treatment issues will be resolved by the existing independent medical review (IMR) process under DMHC or the CDI. 2)BHT . In discussions surrounding this and other related bills, terminology is used interchangeably to refer to presumably the SB 946 Page 7 same or similar types of therapy for the treatment of PDD/A. The California Health Benefits Review Program (CHBRP) analysis of SB 166 (Steinberg), a bill similar to this bill, refers to intensive behavioral intervention therapy, which CHBRP considers interventions based on ABA and/or other theories of behavior. State law defines intensive behavioral intervention therapy as any form of ABA that is comprehensive, designed to address all domains of functioning, and provided in multiple settings for no more than 40 hours per week, across all settings, depending on the individual's needs and progress. Interventions can be delivered in a one-to-one ratio or small group format, as appropriate. The CDI compiled material on the scientific medical literature on the use of BHT/behavioral intervention therapy, including ABA. This bill refers to BHT as professional services and treatment programs, including ABA and other behavior intervention programs, as specified. ABA, which is defined in state law as the design, implementation, and evaluation of systematic instructional and environmental modifications to promote positive social behaviors and reduce or ameliorate behaviors which interfere with learning and social interaction, seems to be at the center of coverage disputes, settlements and litigation. The main question is whether or not ABA is a health care service covered under California's mental health parity law. 3)PDD/A . According to CHBRP, PDD/A includes neurodevelopmental disorders that typically become symptomatic in children aged two to three years, but may not be diagnosed until age five years or older. CHBRP considers five disorders as PDD/A (Autism, Asperger's Disorder, Pervasive Developmental Disorder, Rett's Disorder and Childhood Disintegrative Disorder). ASD is also used but sometimes excludes less common disorders that are technically part of PDD/A. 4)CURRENT PARITY LAW . In 1999, the Legislature passed and the Governor signed AB 88 requiring health plans and health insurers to provide coverage for the diagnosis and medically necessary treatment of certain SMIs of a person of any age, and of serious emotional disturbances of a child, as defined, under the same terms and conditions applied to other medical conditions. Nine specific diagnoses are considered SMI: schizophrenia; schizoaffective disorder; bipolar disorder; major depressive disorder; panic disorder; obsessive compulsive disorder; PDD/A; anorexia nervosa; and, bulimia nervosa. For covered conditions, health plans are required to SB 946 Page 8 eliminate benefit limits and share-of-cost requirements that have traditionally rendered mental health benefits less comprehensive than physical health coverage. Current state law requires mental health parity benefits to include outpatient services, inpatient hospital services, partial hospital services, and prescription drugs, if the health plan contract includes coverage for prescription drugs. Current state regulations require parity coverage for at least, in addition to all basic and other health care services required by Knox-Keene, crisis intervention and stabilization, psychiatric inpatient services, including voluntary inpatient services, and services from licensed mental health providers. The federal Mental Health Parity and Addiction Equity Act (MHPA) requires group health insurance plans to cover mental illness, including ASDs, on the same terms and conditions as other illnesses and helps to end discrimination against those who seek treatment for mental illness. The MHPA does not mandate group health plans provide any mental health coverage. However, if a plan does offer mental health coverage, then it requires equity in financial requirements, such as deductibles, co-payments, coinsurance, and out-of-pocket expenses; equity in treatment limits, such as caps on the frequency or number of visits, limits on days of coverage, or other similar limits on the scope and duration of treatment; and, equality in out-of-network coverage. The MHPA applies to all group health plans for plan years beginning after October 3, 2009, and exempts small firms of 50 or fewer employees. 5)IMR . Individuals covered by health plans or health insurers in California are entitled to an IMR if a health plan or insurer denies health care services or payment for health care services based on medical necessity. An IMR is a process where expert independent medical professionals are selected to review specific medical decisions made by the plans or insurers. DMHC and CDI administer the IMR program to enable consumers to request an impartial appraisal of medical decisions within certain guidelines specified in law. An IMR can only be requested if the plan or insurer's decision involves the medical necessity of a treatment, an experimental or investigational therapy for certain medical conditions, or a claims denial for emergency or urgent medical services. According to CDI, since 2009, 32 behavioral intensive therapy or applied behavioral analysis cases have gone to IMR and 28 were overturned. According to the DMHC, since 2009, 93% of SB 946 Page 9 148 disputes brought to DMHC by consumers, whose health plans have denied some form of autism treatment, have been resolved in favor of the consumer. 6)EHBs . The PPACA requires qualified health plans to cover specified categories of EHBs, including BHT and rehabilitative services, by 2014. The HHS Secretary is tasked with defining these benefit categories through regulation so that they mirror those benefits offered by a "typical" employer plan. Qualified plans are required to cover EHBs by 2014. Federal guidance with respect to EHBs is expected later this year and in 2012. In a January 2011 issue brief by the CHBRP focusing on the federal requirement to cover EHBs, CHBRP notes that there is considerable legal ambiguity over how state mandates requiring the coverage of the treatment for a specific condition or disease will interact with federal law. CHBRP states that these mandates often extend across multiple benefit categories. CHBRP cites, as an example, California's mandate to cover breast cancer treatment, which implicitly requires coverage for screening and testing, medically necessary physician services, ambulatory services, prescription drugs, hospitalization, and surgery. CHBRP writes that it is unclear how California benefit mandates that overlap across several EHB categories would be evaluated in relation to the EHB package. 7)CHBRP . CHBRP was created in response to AB 1996 (Thomson), Chapter 795, Statutes of 2002, which requests the University of California to assess legislation proposing a mandated benefit or service, and prepare a written analysis with relevant data on the public health, medical, and economic impact of proposed health plan and health insurance benefit mandate legislation. Among CHBRP's findings of their analysis of SB 166 are the following: a) Medical Effectiveness . The literature is difficult to synthesize because most studies compared intensive behavioral intervention therapies of differing duration and intensity or compared interventions based on different theories of behavior. Many of the studies do not assess outcomes over sufficiently long periods of time to determine long-term benefits. However, CHBRP did determine that the preponderance of evidence from some meta-analyses suggest that intensive behavioral therapy on applied behavioral analysis is more effective than SB 946 Page 10 therapies based on other theories or less intensive therapies in improving adaptive behavior, increasing intelligence quotient, and in improving expressive language. b) Utilization, Cost, and Coverage Impacts . CHBRP estimates that the postmandate, new benefit coverage would result in a net decrease in expenses for noncovered benefits for an estimated 7,300 enrollees with PDD/A (who use intensive behavioral therapies) of about $146 million. CHBRP assumes this postmandate shift would represent a savings for enrollees, their families, charities, DDS, California Department of Education, and other payors. The extent to which the shift would result in a reduction in financial burden for enrollees with PDD/A (and their families) is unknown. CHBRP estimates an increase in total expenditures by $93.3 million for the insured population resulting from $222.4 million increase in health insurance premiums, and a $17.1 million increase in out-of-pocket expenses for enrollees with PDD/A with newly covered benefits. c) Public Health Impact . CHBRP estimates there could be some improvements to intelligence quotient and adaptive behaviors for children aged 18 months to nine years with diagnoses of PDD/A due to the effectiveness of intensive behavioral intervention therapy and increased benefit coverage on utilization. The public health impact on persons outside of this age range or with other PDDs is unknown. CHBRP found no literature or data regarding the possible differential use or outcomes by gender. The public health impact on reducing potential racial and ethnic disparities of PDD/A symptoms is unknown. There is an increased risk of premature death associated with PDD/A, but CHBRP found no evidence that intensive behavioral intervention therapies would reduce premature death for the population. 8)SENATE SELECT COMMITTEE HEARING . At a recent hearing of the Senate Select Committee on Autism and Related Disorders held on July 13, 2011, the Commissioner of CDI indicated that CDI believes applied behavioral analysis is a covered benefit under mental health parity. The DMHC announced settlement agreements at various stages of completion with Blue Shield of California, Anthem Blue Cross and Kaiser in which it is SB 946 Page 11 anticipated that these health plans would agree to cover ABA services to their enrollees through a network of qualified individuals who are either licensed or are supervised by licensed providers. These settlement agreements are temporary pending the result of litigation or should legislation be enacted on this matter. At the time of the writing of this analysis two of the three agreements have been reached (Blue Shield of California and Anthem Blue Cross). 9)LICENSING ISSUES . Another aspect of the disputes over ABA is whether or not the individuals who provide ABA are, or should be, licensed. Blue Shield of California asserts that ABA is not health care services because the treatment is not provided by individuals who are licensed or certified as health care providers, and Blue Shield's contracts expressly exclude coverage for services provided by individuals not licensed or certified by the State. Behavior analysts, who provide ABA, are typically certified by the Behavior Analyst Certification Board, which is not a government entity. In a July 2011 press release issued by the DMHC announcing the settlement with Blue Shield of California, the DMHC indicates that it prevailed in the Los Angeles Superior Court challenge by Consumer Watchdog on DMHC's enforcement of the law that ABA must be provided by a licensed health care professional. DMHC also indicates that health plans have reported a shortage of providers with the proper licensure or certification to provide many autism therapies. AB 1205 was introduced to set up a licensing process for providers who are certified through the Behavior Analyst Certification Board. According to the policy analysis of AB 1205, there was opposition to AB 1205 due to already strained resources at the Board of Behavioral Sciences, which would have been responsible for licensing behavior analysts. 10)SUPPORT . According to the author, this bill is sponsored by the Alliance of California Autism Organizations; Autism Speaks; Special Needs Network; The Help Group. The Association of Regional Center Agencies supports this bill for many reasons including that it will save the state millions of dollars through offsetting regional center funds towards funding autism health-related treatment and services, which could be used to support other segments of the regional center population. SB 946 Page 12 11)OPPOSITION . The California Association of Health Plans writes in opposition that this bill will increase health premiums by hundreds of million, promises autism benefits that could prove false if the benefits are not included in EHBs, timing is wrong and other mandates were wisely held, government purchasers are exempt, early childhood screening, diagnosis and medical services are already covered by health plans and shifting the responsibility for educational services increases premiums and sets a costly new precedent. 12)OPPOSE UNLESS AMENDED . Consumer Watchdog, which is involved in class action litigation against Blue Cross and Kaiser, as well as individual suits seeking damages for personal injuries, related to wrongful denials, requests amendments. Consumer Watchdog believes provisions in this bill: allow bureaucrats and health insurers to make medical decisions; permit future "proposed" federal regulations to pre-empt state law and open the door for insurers to inappropriately refuse to cover ABA on the grounds that it is educational; undermines access by requiring autism specialists to "employ" providers; and gives insurers an inappropriate shield against several pending civil lawsuits and an enforcement action brought by CDI. Kaiser Permanente indicates that this bill fails to provide clarity around statutory service provision, excludes millions of children from coverage, and creates increased cost pressures on families and businesses that purchase health coverage, and for these reasons oppose this bill unless it is amended to address their concerns. 13)RELATED LEGISLATION . a) AB 171 (Beall) requires health plans and health insurers to cover the screening, diagnosis, and treatment of ASD. AB 171 is pending in the Assembly Appropriations Committee. b) AB 1205 (Bill Berryhill) requires the Board of Behavioral Sciences to license behavioral analysts and assistant behavioral analysts, on and after January 1, 2015, and includes standards for licensure such as specified higher education and training, fieldwork, passage of relevant examinations, and national board accreditation. This bill was held on Suspense in the Assembly Appropriations Committee. c) SB 166 requires health care service plans licensed by DMHC and health insurers licensed by the CDI to provide coverage for BHT for autism. SB 166 is pending in the Senate Health Committee. SB 946 Page 13 d) SB 770 (Steinberg) requires health plans and health insurance policies to provide coverage for BHT. SB 770 is pending in the Assembly Appropriations Committee. 14)POLICY QUESTIONS AND DRAFTING CONCERNS . a) Does the author intend for the mandate provisions of this bill to not be enforced upon the date final proposed PPACA rules are issued if the mandate exceeds EHBs as opposed to the effective date of the rules? This bill's mandate provisions are in effect until July 1, 2014 or as of the date that proposed final rulemaking for EHBs is issued if the coverage under this bill exceeds coverage defined in EHBs. Should the EHB rules be issued as expected on or before 2012 the mandate provisions in this bill could be undone sooner than the effective date of PPACA. PPACA requires the provision of EHBs effective 2014. b) Is DMHC the appropriate convener of the Task Force? The objective of the Task Force appears to be to develop recommendations for a future medical necessity framework for coverage decisions about BHT and recommendations for licensure of behavior analysts. This bill includes requirements that "other agencies, departments, advocates and stakeholders" collaborate on the Task Force. The issues presented by this bill and related disputes create an intersection between education, health care, and developmental services, which suggests a broader policy discussion that may rise to a higher level than the DMHC. REGISTERED SUPPORT / OPPOSITION : Support Supervisor Dave Pine, San Mateo County Association of Regional Center Agencies The Arc United Cerebral Palsy in California Opposition Association of California Life & Health Insurance Companies California Association of Health Plans California Chamber of Commerce SB 946 Page 14 Analysis Prepared by : Teri Boughton / HEALTH / (916) 319-2097