BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 1410| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ UNFINISHED BUSINESS Bill No: SB 1410 Author: Hernandez (D) Amended: 8/20/12 Vote: 21 SENATE HEALTH COMMITTEE : 6-3, 4/11/12 AYES: Hernandez, Alquist, De León, DeSaulnier, Rubio, Wolk NOES: Harman, Anderson, Blakeslee SENATE APPROPRIATIONS COMMITTEE : 5-2, 5/24/12 AYES: Kehoe, Alquist, Lieu, Price, Steinberg NOES: Walters, Dutton SENATE FLOOR : 25-13, 5/30/12 AYES: Alquist, Calderon, Corbett, Correa, De León, DeSaulnier, Evans, Hancock, Hernandez, Kehoe, Leno, Lieu, Liu, Lowenthal, Negrete McLeod, Padilla, Pavley, Price, Rubio, Simitian, Steinberg, Vargas, Wolk, Wright, Yee NOES: Anderson, Berryhill, Blakeslee, Cannella, Dutton, Emmerson, Fuller, Gaines, Harman, Huff, La Malfa, Walters, Wyland NO VOTE RECORDED: Runner, Strickland ASSEMBLY FLOOR : 77-2, 8/27/12 - See last page for vote SUBJECT : Independent medical review SOURCE : Author DIGEST : This bill modifies the external Independent CONTINUED SB 1410 Page 2 Medical Review (IMR) process established for individuals enrolled in health plan products licensed by the Department of Managed Health Care (DMHC) and insureds of health insurance policies licensed by the Department of Insurance (DOI) by enhancing requirements of clinical reviewers, and requesting additional patient demographic information. Assembly Amendments makes the existing IMR framework inoperative on July 1, 2015, and as of January 1, 2016, is repealed, unless a later enacted statute deletes or extends it. ANALYSIS : Existing law: 1.Requires the licensing and regulation of health care service plans (health plans) by the DMHC, and requires the licensing and regulation of health insurers by DOI. 2.Requires DMHC and DOI to establish an IMR system under which an enrollee or insured must seek an external IMR whenever health care services have been denied, modified, or delayed by a health plan or insurer (collectively "carriers") and the enrollee or insured has previously filed a grievance that remains unresolved after 30 days. 3.Requires medical professionals selected by an IMR organization to review medical treatment decisions to meet certain minimum requirements, including that he or she be a clinician knowledgeable in the treatment of the patient's medical condition, knowledgeable about the proposed treatment, and familiar with guidelines and protocols in the area of treatment under review. 4.Requires DMHC and DOI to adopt the determination of an IMR organization as binding on the health plan or insurer. 5.Requires the IMR decisions to be made freely available, on request, to the public, and requires certain information to be removed from the decision before it is made available to the public, including the name of the carrier. The bill makes the existing IMR framework inoperative on CONTINUED SB 1410 Page 3 July 1, 2015, and as of January 1, 2016, is repealed, unless a later enacted statute deletes or extends it, and establishes a new framework revised as follows on July 1, 2015: 1.Requires the notification from each department to the enrollee or insured regarding the disposition of the enrollee's or insured's grievance to include a section designed to collect information on the enrollee's ethnicity, race, and primary language spoken that includes both of the following: A statement of intent indicating that the information is used for statistics only, in order to ensure that all enrollees get the best care possible; and A statement indicating that providing this information is optional and will not affect the IMR process in any way. 1.Modifies minimum requirements of medical professionals selected to review medical treatment decisions to require a clinician expert in the treatment of the enrollee's medical condition and knowledgeable about the proposed treatment through recent or current actual clinical experience treating patients with the same or similar medical conditions as the enrollee. 2.Specifies requirements for the database and that the database be accompanied by: The annual rate of IMR among the total enrolled or insured population; The annual rate of IMR review cases by health plan or health insurer; The number, type, and resolution of IMR cases by health plan or health insurer; and The number, type, and resolution of IMR cases by ethnicity, race, and primary language spoken. CONTINUED SB 1410 Page 4 Background Types of IMR cases . California's IMR provides for independent, external review of three main types of disputed carrier decisions: medical necessity, urgent/emergency care, and experimental/investigational. Medical necessity IMR cases occur when carriers deny, modify, or delay requests for coverage of services in whole or in part due to findings that the services are not medically necessary. Medical necessity decisions are distinguished from coverage decisions, which are reviewed directly by DMHC and DOI rather than through IMR. Both covered benefits and medical necessity are defined contractually and vary among carriers. According to existing law, a medical necessity decision regarding a disputed health care service relates to the practice of medicine and is not a coverage decision, while a coverage decision means the approval or denial of health care services based on a finding that the provision of a health care service is included or excluded as a covered benefit under the terms of a health carrier contract. Carriers categorize their decisions as medical necessity or coverage decisions, but DMHC and DOI have the final authority as to how disputed decisions will be categorized and appealed. Urgent or emergency care IMR cases are for services already received, when a carrier decides that the services did not require urgent care and that the patient should have known that an emergency did not exist even if a provider deemed the services to be medically necessary. Experimental or investigational IMR cases occur when carriers deny coverage of services for patients on the basis that the disputed service is considered experimental or investigational by the carrier. In order for a patient to have access to IMR under these circumstances: The patient must have a life-threatening or seriously debilitating condition; The patient's physician must certify that the patient has a condition for which standard services have not been effective or medically appropriate, or for which there is CONTINUED SB 1410 Page 5 no more beneficial standard service covered by the plan than the one proposed; The patient's physician must have recommended or the patient or physician must have requested a service which, based on medical and scientific evidence, is likely to be more beneficial than services that are standardly available; The carrier must have denied coverage of the service; and The service would be a covered benefit except for the carrier's decision that it is experimental or investigational. Prior Legislation AB 55 (Migden), Chapter 533, Statutes of 1999, created the IMR system and requires every health carrier to provide those receiving coverage from these products with an opportunity to seek an IMR whenever health care services have been denied, modified, or delayed in cases where a carrier deems the services to be medically unnecessary. SB 189 (Schiff), Chapter 542, Statutes of 1999, established an IMR process for experimental or investigational therapies; requires the contracting of impartial, independent, accredited entities for the purposes of the IMR process; and amends the internal grievance processes of carriers. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No According to the Senate Appropriations Committee: One-time costs of about $100,000 and ongoing costs of about $100,000 to revise the existing database by the Department of Managed Health Care (Managed Care Fund). One-time costs of about $460,000 and ongoing costs of about $100,000 to revise the existing database system by the Department of Insurance (Insurance Fund). CONTINUED SB 1410 Page 6 Ongoing costs of about $200,000 per year to collect and analyze additional data by the Department of Insurance (Insurance Fund). Ongoing costs of about $200,000 per year to collect and analyze additional data by the Department of Managed Health Care (Managed Care Fund). Ongoing costs in the low hundreds of thousands for the operation of the independent medical review process due to increased standards for reviewer experience (Managed Care Fund and Insurance Fund). SUPPORT : (Verified 8/28/12) BayBio BIOCOM California Healthcare Institute California Orthopaedic Association California Pan-Ethnic Health Network California Psychiatric Association Neuropathy Action Foundation ARGUMENTS IN SUPPORT : The California Pan-Ethnic Health Network writes in support of this bill and its requirement for DMHC and DOI to collaborate on a more complete and standardized database of IMR cases, arguing that the bill will allow for more effective program use and oversight by consumers, carriers, regulators, and policymakers by facilitating stronger assessments of IMR use and better outcomes for all Californians including communities of color. The California Psychiatric Association (CPA) writes that by increasing the standards for clinicians to participate as reviewers, this bill continues the quest for quality in the delivery of managed health care services, and for helping safeguard the rights of patients to have access to the very best, most appropriate medical care. The CPA additionally recommends that a reviewer should be a physician who is board certified or qualified to be board-eligible in the medical specialty which is the predominant field within which a particular treatment expertise is bestowed. The Neuropathy Action Foundation writes that this bill is especially important because it strengthens the minimum standard for reviewers to CONTINUED SB 1410 Page 7 participate in an IMR case. The California Healthcare Institute argues in support of the bill that by requiring IMR to be conducted by a clinician with expertise in the enrollee's medical condition, This bill ensures that patients receive the most appropriate treatment when coverage is initially denied. BIOCOM writes that this bill would significantly strengthen IMR by ensuring that reviewers are well versed in both the condition in question and current treatment options, thus providing a vital check to ensure that consumers have access to quality medical care. ASSEMBLY FLOOR : 77-2, 8/27/12 AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill Berryhill, Block, Blumenfield, Bonilla, Bradford, Brownley, Buchanan, Butler, Charles Calderon, Campos, Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson, Eng, Feuer, Fletcher, Fong, Fuentes, Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Gorell, Grove, Hagman, Halderman, Hall, Harkey, Hayashi, Roger Hernández, Hill, Huber, Hueso, Huffman, Jeffries, Jones, Knight, Lara, Logue, Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell, Monning, Nestande, Nielsen, Norby, Olsen, Pan, Perea, V. Manuel Pérez, Portantino, Silva, Skinner, Smyth, Solorio, Swanson, Torres, Valadao, Wagner, Wieckowski, Williams, Yamada, John A. Pérez NOES: Donnelly, Morrell NO VOTE RECORDED: Furutani CTW:n 8/28/12 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED