BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 946 (Steinberg and Evans)
Hearing Date: 9/9/2011 Amended: 9/9/2011
Consultant: Katie Johnson Policy Vote: N/A
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BILL SUMMARY: AB 946 would require health care service plans and
health insurers to provide coverage for behavioral health
treatment for pervasive developmental disorder and autism
(PDD/A) from July 1, 2012, through July 1, 2014, or earlier, as
specified. Additionally, this bill would make changes to law
related to HIV reporting and mental health services payments.
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Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
DMHC oversight $0 in the low hundreds of
Special*
thousands of dollars
Potential cost shift from unknown, potentially in the
millions to tens General**
public to private payers of millions of dollars in cost
avoidance
*Managed Care Fund
**Likely mostly General Fund and Proposition 98 flexibility. See
Staff Comments.
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
Staff notes that a previous version of this bill, which was
authored by the Senate Health Committee, was sent to the Senate
Floor pursuant to Senate Rule 28.8. The bill was subsequently
amended in the Assembly. It is in the Senate for concurrence and
was referred to this Committee pursuant to Senate Rule 29.10.
Therefore, although this bill meets the criteria for referral to
the Suspense File, this Committee may only: 1) hold the bill in
Committee, or 2) return the bill as approved by the Committee to
the Senate Floor. The bill may not be referred to the Suspense
File or amended at this time.
SB 946 (Steinberg and Evans)
Page 1
Health Care Coverage Requirements
This bill would require health care service plans and health
insurers to provide coverage for behavioral health treatment for
pervasive developmental disorder or autism (PDD/A) from July 1,
2012, through July 1, 2014, in a manner that is consistent with
existing state mental health parity law. This bill would provide
that as of the date that proposed final rulemaking for essential
health benefits is issued pursuant to the Patient Protection and
Affordable Care Act (PPACA), these provisions would not require
any benefits to be provided that exceed the essential health
benefits, which all health plans and insurers would be required
to offer. If the federal rules are defined prior to July 1,
2014, then the provisions in this bill would sunset prior to
that date. Additionally, these provisions may effectively sunset
earlier than July 1, 2014, since the PPACA essential health
benefits law would go into effect January 1, 2014.
This bill would define "behavioral health treatment" as
professional services and treatment programs, including applied
behavior analysis and evidence-based behavior intervention
programs, that develop or restore, to the maximum extent
practicable, the functioning of an individual with pervasive
developmental disorder or autism and that are provided by
licensed, unlicensed, or uncertified providers, as specified.
The Department of Managed Health Care (DMHC) would be required
to establish the Autism Advisory Task Force and to submit a
report to the Governor and the Legislature by December 31, 2012.
This bill would not apply to specialized health care service
plans or insurance policies that do not deliver mental or
behavioral health services and health plans or insurers that
contract with the state's Medi-Cal Program (Medi-Cal), Healthy
Families Program (Healthy Families), and the California Public
Employees' Retirement System (CalPERS).
The most recent amendments make clarifying changes that would 1)
provide that the treatment plan should not be used for the
reimbursement of respite, day care, or school services, 2)
permit a treatment plan to be developed by a psychologist rather
than prescribed by one, 3) relate to the use of evidence-based
therapies, and 4) permit health plans and insurers may utilize
case management, network providers, utilization review
techniques, prior authorization, copayments, or other cost
sharing with regards to these provisions in the same manner as
SB 946 (Steinberg and Evans)
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for mental health services under the state's mental health
parity law.
Fiscal Effect
Related Legislation
This bill is similar, though not identical, to SB 166
(Steinberg) and SB 770 (Steinberg). SB 166 (Steinberg) would
require health care service plans and health insurers, except
for plans contracted with Medi-Cal, to provide coverage for
behavioral intervention therapy. SB 770 (Steinberg) would
require health plans and insurers, except plans contracted with
Medi-Cal, to provide coverage for behavioral health treatment
and to permit unlicensed and uncertified providers, in addition
to licensed providers, to render services to clients. Both bills
were held as two-year bills in the Assembly Appropriations
Committee. The fiscal analysis below is based on information
gleaned from a California Health Benefits Review Program (CHBRP)
report on SB 166, formerly entitled SB TBD1, and a letter
regarding SB 770 and how its impact on coverage compares to SB
166. This bill, SB 946, is substantially similar to SB 770
except that, 1) in addition to plans and insurers contracting
with Medi-Cal, it would exempt plans and insurers contracting
with Healthy Families and CalPERS, 2) it would be in effect only
July 1, 2012, to July 1, 2014, or to the date on which federal
essential health benefits rules take effect, and 3) it would
require DMHC to establish the Autism Advisory Task Force.
PPACA
PPACA requires all health plans and insurers, commencing January
1, 2014, that are offering health care coverage within "health
benefit exchanges" to cover specified categories of benefits,
termed "essential health benefits." Federal law also specifies
that if states choose to require health plans and insurers to
cover benefits above and beyond the essential health benefits,
the state must pay for the additional costs of those mandated
benefits.
In stating that these provisions would not go beyond those
required by PPACA, this bill would alleviate future cost
pressure on the state to pay for health benefits required by
state law that would exceed the essential health benefits.
However, to the extent that this bill would put in place health
care benefits for individuals for approximately 2 years that
would be more extensive than those ultimately required by PPACA,
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there would be unknown cost pressure on the state to maintain
the higher level of coverage for people that would purchase
subsidized health care coverage through the California Health
Benefit Exchange. Federal guidance that further defines the
essential health benefits is expected in late 2011 and in 2012.
State Health Care Coverage Payments
Since this bill would exempt health plans and insurers that
contract with Medi-Cal, Healthy Families, and CalPERS, there
would be minimal costs to the state to pay for these mandated
services. Although plans that contract with the Access for
Infants and Mothers program (AIM) and the Major Risk Medical
Insurance Program (MRMIP) would be subject to this bill and the
state, as the payer, would be required to pay for any additional
services provided to enrollees, behavioral health treatment
services are usually provided to children aged 18 months to 9
years of age. Since the infants and their mothers in AIM are
outside the age range and there are very few children in MRMIP,
costs to these two programs would likely be minimal. AIM is
funded with Proposition 99 revenues, federal funds, and
subscriber premiums and MRMIP is funded with Proposition 99
funds and subscriber premiums.
Potential Cost Shift from Public to Private Payers
The Department of Developmental Services (DDS) provides services
to individuals with developmental disabilities, including
consumers with autism, through a system of 21 regional centers
and 4 developmental centers. Further, California's public school
system, administered by the California Department of Education
(CDE), provides special education services to eligible children,
including those with PDD/A. According to a report on SB TBD1,
which became SB 166 (Steinberg), by the California Health
Benefits Review Program (CHBRP), there could be a decrease in
expenditures by entities that are not health plans or insurers
of up to approximately $146.2 million; these entities would
include DDS, the state public school system, enrollees, their
families, and charities, among other payers.
CHBRP estimated that approximately 77,000 individuals with PDD/A
have existing health care coverage that would be subject to this
bill and that 1,400 receive intensive behavioral intervention
therapies paid for by their health care coverage. If SB 166 were
to have been enacted, CHBRP estimated that approximately 7,300
more individuals would have received services through their
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health plan or insurer. CHBRP also predicted that total
expenditures would increase by about $93.3 million net for plans
and insurers. The increase would result from a $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. Due to the exemption of Healthy Families
and CalPERS and the permission to utilize unlicensed and
uncertified providers in this bill, the increased expenditures,
increased premiums, and cost shift would likely be lower in
magnitude than for SB 166, as stated in a CHBRP letter regarding
SB 770.
To the extent that this bill would cause expenditures for
behavioral health treatment services to shift from the state to
private health plans and insurers, there would be significant
cost savings to the state, mostly General Fund and flexibility
within the Proposition 98 guarantee, from July 1, 2012, through
the earlier of the date of the final federal rulemaking for
essential health benefits or July 1, 2014. After the final rules
are in place or by July 1, 2014, when this bill sunsets, the
state's financial obligation to pay for these services could
return in some form, depending on the details of federal health
care coverage requirements.
The actual amount of expenditures that would shift to private
health plans and insurers would depend on the amount currently
spent on these services by the state and the state's success in
appropriately identifying instances where a third party payer
has payment responsibility. Additionally, the provisions that
exempt Healthy Families and CalPERS plans would decrease the
magnitude of the cost shift since the CHBRP figure assumed that
Healthy Families and CalPERS would have paid for behavioral
health treatment services instead of DDS, CDE, and other payers.
In 2009-2010, DDS provided behavioral treatments for about 6,700
consumers, who are not Medi-Cal beneficiaries, at a cost of
$88.9 million. It is unknown how many of these consumers have
private health care coverage that would be subject to this bill
and how much of the cost DDS would be able to shift to the
private payers.
Regulatory Costs
In order to establish the task force, address coverage
questions, complaints and grievances, and provider payment
issues, as well as to perform other duties, there could be costs
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in the low hundreds of thousands of dollars in special funds in
FY 2012-2013 and FY 2013-2014 to DMHC. There would be no
additional cost to the California Department of Insurance to
oversee insurers subject to these provisions. In July 2011, DMHC
announced settlements with Blue Shield of California and Anthem
Blue Cross in which the health plans would pay for applied
behavioral analysis (ABA) therapy, a type of behavioral health
treatment.
Provisions Carried Over from Committee Bill Version of SB 946
This bill would:
1) Conform state law to existing federal regulations and
current Department of Mental Health (DMH) practice by
repealing the authorization to approve negotiated rates and
incentive payments for Short-Doyle/Medi-Cal services. Costs
to DMH would be minor and absorbable since the department
is already complying with the provisions of this bill;
2) Authorize the California Department of Public Health
(CDPH) to develop a form to be used to report cases of
Human Immunodeficiency Virus (HIV) infection to the local
health department and would provide that the form may be
adopted without the promulgation of regulations. Costs to
CDPH would be minor and absorbable.
Both of these provisions were part of SB 946 when it passed out
of the Senate Appropriations Committee pursuant to Senate Rule
28.8 as a Senate Health Committee bill.