Amended in Assembly March 19, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 617

Introduced by Assembly Member Nazarian

February 20, 2013

An act to amend begin delete 1341.1 of the Health and Safety Code end delete begin insert Section 100501 of, and to add Sections 100506.1, 100506.2, 100506.3, 100506.4, and 100506.5 to, the Government Code end insert , relating to health care coverage.

LEGISLATIVE COUNSEL’S DIGEST

AB 617, as amended, Nazarian. begin delete Health care coverage. end delete begin insert California Health Benefit Exchange: appeals. end insert

begin insert

Existing federal law, the federal Patient Protection and Affordable Care Act (PPACA), enacts various health care coverage market reforms that take effect January 1, 2014. PPACA also requires each state to, by January 1, 2014, establish an American Health Benefit Exchange that facilitates the purchase of qualified health plans by qualified individuals and qualified small employers, as specified. Existing law establishes the California Health Benefit Exchange (Exchange) to implement the federal law. Existing law also requires the Exchange board to establish an appeals process for prospective and current enrollees of the Exchange that complies with all requirements of the federal act concerning the role of a state Exchange in facilitating federal appeals of Exchange-related determinations.

end insert begin insert

This bill would require the Exchange board to contract with the State Department of Social Services to serve as the Exchange appeals entity designated to hear appeals of eligibility determination or redetermination for persons in the individual market. The bill would establish an appeals process for initial eligibility determinations and redetermination, including an informal resolution process, as specified, establishing procedures and timelines for hearings with the appeals entity, and notice provisions. The bill would also establish continuing eligibility for individuals during the appeals process.

end insert begin delete

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care, and makes a willful violation of its provisions a crime. Existing law provides for the establishment and operation of a principal office and branch offices of the Director of the Department of Managed Health Care.

end delete begin delete

This bill would make technical, nonsubstantive changes to that provision.

end delete

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 100501 of the end insert begin insert Government Code end insert begin insert is
amended to read: end insert

100501.  

For purposes of this title, the following definitions
shall apply:

(a) “Board” means the board described in subdivision (a) of
Section 100500.

(b) “Carrier” means either a private health insurer holding a
valid outstanding certificate of authority from the Insurance
Commissioner or a health care service plan, as defined under
subdivision (f) of Section 1345 of the Health and Safety Code,
licensed by the Department of Managed Health Care.

(c) “Exchange” means the California Health Benefit Exchange
established by Section 100500.

(d) “Federal act” means the federal Patient Protection and
Affordable Care Act (Public Law 111-148), as amended by the
federal Health Care and Education Reconciliation Act of 2010
(Public Law 111-152), and any amendments to, or regulations or
guidance issued under, those acts.

(e) “Fund” means the California Health Trust Fund established
by Section 100520.

(f) “Health plan” and “qualified health plan” have the same
meanings as those terms are defined in Section 1301 of the federal
act.

(g) “SHOP Program” means the Small Business Health Options
Program established by subdivision (m) of Section 100502.

begin insert

(h) “State health subsidy program” means a program described
in Section 1413(e) of the federal act.

end insert begin delete

(h)

end delete

begin insert (i) end insert  “Supplemental coverage” means coverage through a
specialized health care service plan contract, as defined in
subdivision (o) of Section 1345 of the Health and Safety Code, or
a specialized health insurance policy, as defined in Section 106 of
the Insurance Code.

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 100506.1 is added to the end insert begin insert Government Code end insert begin insert ,
to read: end insert

begin insert

begin insert 100506.1. end insert   

An applicant or enrollee has the right to appeal any
of the following:

(a) An action or inaction related to the individual’s eligibility
for a state health subsidy program, or for advance payment of
premium tax credits and cost-sharing reductions, the amount of
the advance payment of the premium tax credit and level of cost
sharing, or eligibility for affordable plan options.

(b) An eligibility determination for an exemption from the
individual responsibility penalty pursuant to Section 1311(d)(4)(H)
of the federal act.

(c) A failure to provide timely notice of an eligibility
determination or redetermination.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 100506.2 is added to the end insert begin insert Government Code end insert begin insert ,
to read: end insert

begin insert

begin insert 100506.2. end insert   

(a) The entity making a determination of eligibility
described in Section 100506.1 shall provide notice of the appeals
process at the time of application and determination of eligibility.

(b) The entity making a determination of eligibility described
in Section 100506.1 shall also issue a combined eligibility notice,
as defined by Section 435.4 of Title 42 of the Code of Federal
Regulations, that shall contain all of the following:

(1) Information about each state health subsidy program for
which an individual or multiple family members of a household
have been determined to be eligible or ineligible and the effective
date of eligibility and enrollment.

(2) Information regarding the bases of eligibility for
non-Modified Adjusted Gross Income (MAGI) Medi-Cal and the
benefits and services afforded to individuals eligible on those
bases, sufficient to enable the individual to make an informed
choice as to whether to appeal the determination.

(3) An explanation that the applicant or enrollee may appeal
an action or inaction related to an individual’s eligibility for a
state health subsidy program with which the applicant or enrollee
is dissatisfied by requesting a hearing consistent with Section
100506.4 and the provisions of Chapter 7 (commencing with
Section 10950) of Part 2 of Division 9 of the Welfare and
Institutions Code.

(4) Information on the applicant or enrollee’s right to represent
himself or herself or to be represented by legal counsel or an
authorized representative as provided in subdivision (f) of Section
100506.4.

(5) An explanation of the circumstances under which the
applicant’s or enrollee’s eligibility may be maintained or reinstated
pending an appeal decision, pursuant to Section 100506.5.

end insert

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 100506.3 is added to the end insert begin insert Government Code end insert begin insert ,
to read: end insert

begin insert

begin insert 100506.3. end insert   

The board shall enter into a contract with the State
Department of Social Services to serve as the Exchange appeals
entity designated to hear appeals of eligibility determination or
redetermination for persons in the individual market, pursuant to
Section 100506 and Subpart F of Part 155 of Title 45 of the Code
of Federal Regulations. Except as otherwise provided in this title,
the hearing process shall be governed by the Medi-Cal hearing
process established in Chapter 7 (commencing with Section 10950)
of Part 2 of Division 9 of the Welfare and Institutions Code.

end insert

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 100506.4 is added to the end insert begin insert Government Code end insert begin insert ,
to read: end insert

begin insert

begin insert 100506.4. end insert   

(a) (1) Except as provided in paragraph (2), the
State Department of Social Services, acting as the appeals entity,
shall allow an applicant or enrollee to request an appeal within
90 days of the date of the notice of an eligibility determination.

(2) The appeals entity shall establish and maintain a process
for an applicant or enrollee to request an expedited appeals
process where there is immediate need for health services because
a standard appeal could seriously jeopardize the appellant’s life,
health, or the ability to attain, maintain, or regain maximum
function. If an expedited appeal is granted, the decision shall be
issued within three working days or as soon as is required by the
appellant’s condition. If an expedited appeal is denied, the appeals
entity shall notify the appellant within two days by telephone or
electronic media, to be followed in writing, of the denial of an
expedited appeal. If an expedited appeal is denied, the appeal shall
be handled through the standard appeal process.

(b) Appeal requests may be submitted to the appeals entity by
telephone, by mail, in person, through the Internet, or by facsimile.

(c) The staff of the Exchange may assist the applicant or enrollee
in making the appeal request.

(d) (1) Upon receipt of an appeal, the appeals entity shall send
timely acknowledgment to the appellant that the appeal has been
received. The acknowledgment shall include information relating
to the appellant’s eligibility for benefits while the appeal is
pending, an explanation that advance payments of the premium
tax credit while the appeal is pending are subject to reconciliation,
an explanation that the appellant may participate in informal
resolution pursuant to subdivision (g), and information regarding
how to initiate informal resolution.

(2) Upon receipt of an appeal, the appeals entity shall send, via
secure electronic interface, timely acknowledgment of the appeal
to the entity that made the determination of eligibility being
appealed.

(3) Upon receipt of the notice of appeal from the appeals entity,
the entity that made the determination of eligibility being appealed
shall transmit, either as a hard copy or electronically, the
appellant’s eligibility record for use in the adjudication of the
appeal to the appeals entity.

(4) Upon receipt of an appeal that fails to meet the requirements
of this section, the appeals entity shall promptly and without undue
delay send written notice to the appellant that the appeal is not
accepted and the reason why. The appellant shall be given an
opportunity to cure, if possible, and the appeals entity shall accept
amended appeals that fulfill all the requirements for appeal,
including timeliness.

(e) A member of the board, employee of the Exchange, a county,
the Managed Risk Medical Insurance Board (MRMIB), or the
appeals entity shall not limit or interfere with an applicant or
enrollee’s right to make an appeal or attempt to direct the
individual’s decisions regarding the appeal.

(f) An applicant or enrollee may be represented by counsel or
designate an authorized representative to act on his or her behalf,
including, but not limited to, when making an appeal request and
participating in the informal resolution process provided in
subdivision (g).

(g) An applicant or enrollee who files an appeal shall have the
opportunity for informal resolution, prior to a hearing, that
conforms with all of the following:

(1) The appellant’s right to a hearing shall be preserved if the
appellant is dissatisfied with the outcome of the informal resolution
process.

(2) If the appeal advances to a hearing, the appellant shall not
be required to provide duplicative information or documentation
that he or she previously provided during the application,
redetermination, or informal resolution processes.

(3) The informal resolution process shall not delay the timeline
for a provision of a hearing.

(4) For eligibility determinations for state health subsidy
programs based on modified adjusted gross income (MAGI), the
appellant may initiate the informal resolution process with the
entity that made the eligibility determination, except that all of the
following shall apply:

(A) The Exchange shall conduct informal resolution involving
issues related only to the Exchange, including, but not limited to,
exemption from the individual responsibility penalty pursuant to
Section 1311(d)(4)(H) of the federal act, offers of affordable
employer coverage, special enrollment periods, and eligibility for
affordable plan options.

(B) Counties shall conduct informal resolution involving issues
related to non-MAGI Medi-Cal.

(C) MRMIB shall conduct informal resolution involving issues
related only to the Access for Infants and Mothers Program or the
Healthy Families Program.

(5) The staff involved in the informal resolution process shall
try to resolve the issue through a review of case documents, and
shall give the appellant the opportunity to review case documents,
verify the accuracy of submitted documents, and submit updated
information or provide further explanation of previously submitted
documents.

(6) The informal resolution process set forth by the State
Department of Health Care Service’s Manual of Policies and
Procedures Section 22-073 shall be used for the informal
resolutions pursuant to this subdivision.

(h) (1) A position statement, as required by Section 10952.5 of
the Welfare and Institutions Code, shall be electronically available
at least two working days before the hearing on the appeal.

(2) The appeals entity shall send written notice, electronically
or in hard copy, to the appellant of the date, time, and location of
the hearing no later than 15 days prior to the date of the hearing.
If the date, time, and location of the hearing are prohibitive of
participation by the appellant, the appeals entity shall make
reasonable efforts to set a reasonable, mutually convenient date,
time, and location.

(3) The format of the hearing may be telephonic, video
teleconference, or in person.

(4) The hearing shall be an evidentiary hearing where the
appellant may present evidence, bring witnesses, establish all
relevant facts and circumstances, and question or refute any
testimony or evidence, including, but not limited to, the opportunity
to confront and cross-examine adverse witnesses, if any.

(5) The hearing shall be conducted by one or more impartial
officials who have not been directly involved in the eligibility
determination or any prior appeal decision in the same matter.

(6) The appellant shall have the opportunity to review his or
her appeal record and all documents to be used by the appeals
entity at the hearing, at a reasonable time before the date of the
hearing as well as during the hearing.

(7) Cases and evidence shall be reviewed de novo by the appeals
entity.

(i) Decisions shall be made within 90 days from the date the
appeal is filed, or as soon as administratively feasible, and shall
be based exclusively on the application of the eligibility rules to
the information used to make the eligibility decision, as well as
any other information provided by the appellant during the course
of the appeal. The content of the decision of appeal shall include
a decision with a plain language description of the effect of the
decision on the appellant’s eligibility, a summary of the facts
relevant to the appeal, an identification of the legal basis for the
decision, and the effective date of the decision, which may be
retroactive.

(j) Upon adjudication of the appeal, the appeals entity shall
transmit the decision of appeal to the entity that made the
determination of eligibility via a secure electronic interface.

(k) If an appellant disagrees with the decision of the appeals
entity, he or she may make an appeal request regarding issues
relating to the Exchange to the federal Health and Human Services
Agency within 30 days of the notice of decision through any of the
methods in subdivision (b).

(l) An appellant may also seek judicial review to the extent
provided by law.

(m) Nothing in this section, or in Sections 100506.1 and
100506.2, shall limit or reduce an appellant’s rights to notice,
hearing, and appeal under Medi-Cal, county indigent programs,
or any other public programs.

end insert

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 100506.5 is added to the end insert begin insert Government Code end insert begin insert ,
to read: end insert

begin insert

begin insert 100506.5. end insert   

For appeals of redeterminations, upon receipt of
notice from the appeals entity that it has received an appeal, the
entity that made the redetermination shall continue to consider
the applicant or enrollee eligible while the appeal is pending in
accordance with the level of eligibility immediately before the
redetermination being appealed.

end insert

begin delete

SECTION 1.  

Section 1341.1 of the Health and Safety Code is
amended to read:

1341.1.  

The director shall have his or her principal office in
the City of Sacramento, and may establish branch offices in the
City and County of San Francisco, in the City of Los Angeles, and
in the City of San Diego. The director shall from time to time
obtain the necessary furniture, stationery, fuel, light, and any other
proper convenience for the transaction of the business of the
Department of Managed Health Care.

end delete