BILL ANALYSIS Ó SB 946 Page 1 ( Without Reference to File ) SENATE THIRD READING SB 946 (Steinberg and Evans) As Amended September 9, 2011 Majority vote SENATE VOTE :Vote not relevant HEALTH 13-5 APPROPRIATIONS 12-5 ----------------------------------------------------------------- |Ayes:|Monning, Ammiano, Atkins, |Ayes:|Fuentes, Blumenfield, | | |Bonilla, Eng, Gordon, | |Bradford, Charles | | |Hayashi, | |Calderon, Campos, Davis, | | |Roger Hernández, Bonnie | |Gatto, Hall, Hill, Lara, | | |Lowenthal, Mitchell, Pan, | |Mitchell, Solorio | | |V. Manuel Pérez, Williams | | | | | | | | |-----+--------------------------+-----+--------------------------| |Nays:|Logue, Garrick, Mansoor, |Nays:|Harkey, Donnelly, | | |Nestande, Silva | |Nielsen, Norby, Wagner | | | | | | ----------------------------------------------------------------- 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 to also provide coverage for BHT for PDD/A no later than July 1, 2012. 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. 2)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 SB 946 Page 2 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. 3)Requires DMHC, in consultation with the California Department of Insurance (CDI), to convene a Task Force by February 1, 2012, to develop recommendations regarding BHT that are medically necessary for the treatment of individuals with autism or pervasive developmental disorder, as specified. 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. 4)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. 5)Provides that nothing in this bill be construed to limit the obligation to provide services under California's mental health parity law. Permits a health plan or health insurer to utilize case management, network providers, utilization review techniques, prior authorization, copayments, or other cost sharing as provided in California's mental health parity law. FISCAL EFFECT : According to the Assembly Appropriations Committee: 1)One-time costs to the DMHC of in the range of $50,000 (special fund) to conduct a stakeholder process and publish recommendations. 2)Minor, if any, state health care costs. This bill exempts health plans provided through Medi-Cal, Healthy Families Program, and California Public Employees Retirement System (CalPERS) from the coverage mandate. SB 946 Page 3 3)A California Health Benefits Review Program (CHBRP) analysis of a similar bill, SB 166 (Steinberg, 2011) identified 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. Because CHBRP's analysis of SB 166 assumed that behavioral health services would be delivered by licensed providers, while SB 946 stipulates that unlicensed providers can deliver services, the costs would likely be less than the estimate of $177 million. 4)Potentially significant one-time General Fund (GF) cost savings. CHBRP reports in their analysis of SB 166 that $146 million in cost savings annually would accrue to current payers of PDD/A-related services (primarily school districts and the state Department of Developmental Services (DDS)). Given that the mandate to cover behavioral health treatment is only in effect for a maximum of 18 months beginning July 1, 2012, the volume of services that would transition from current payers to health plans, and the speed of these transitions, is unknown. Also, given data limitations, it is difficult to estimate precisely where cost savings would accrue. Savings would partially depend on the success of DDS in identifying other payers. One-time GF cost savings to DDS associated with this bill could be in the range of tens of millions of dollars in budget year 2012-13, assuming individuals transitioned quickly from services provided by DDS and schools to services reimbursed by health plan and insurers. Savings in 2013-14 would be similar in magnitude but would only be accrued for the first six months of the fiscal year. School districts would not experience 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 PPD/A-related services could be redirected to other activities. 5)As the bill is currently drafted, no state fiscal liability related to the PPACA. The PPACA creates new state-run health insurance exchanges that will likely provide coverage to millions of Californians, and requires that health plans SB 946 Page 4 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 PPACA 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. 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 this bill would go beyond what will be included in federally defined EHBs, but it is plausible that EHBs may not mandate coverage of applied behavior analysis (ABA). To mitigate potential fiscal concerns, this bill 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 was triggered off, children both inside and outside the Exchange could lose coverage, raising potential policy issues related to disruption of treatment. On the other hand, if the operative dates of the coverage mandate were extended, the state could incur significant fiscal liability related to the marginal cost of this mandate for individuals in the Exchange. COMMENTS : According to the author, the intent of this legislation is to ensure that therapeutic decisions for the medical treatment of Autism Spectrum Disorder (ASD) remain in the hands of physicians and other appropriate medical professionals. 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. This bill refers to BHT as professional services and treatment programs, SB 946 Page 5 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. A secondary question is whether behavior analysts who provide ABA should be licensed by the state. 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. 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. 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 SB 946 Page 6 their concerns. Analysis Prepared by : Teri Boughton / HEALTH / (916) 319-2097 FN: 0002863