BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 946
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          (  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        
           
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          |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 








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            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.








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          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 








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            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, 








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          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 








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          their concerns.


           Analysis Prepared by  :    Teri Boughton / HEALTH / (916) 319-2097 


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