Amended in Assembly April 15, 2013

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 Section 100501 of, and to add Sections 100506.1, 100506.2, 100506.3, 100506.4, and 100506.5 to, the Government Code, relating to health care coverage.

LEGISLATIVE COUNSEL’S DIGEST

AB 617, as amended, Nazarian. California Health Benefit Exchange: appeals.

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.

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 begin insert or enrollment end insert 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.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

SECTION 1.  

Section 100501 of the Government Code is
amended to read:

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.

begin insert

(g) “MRMIB” means the Managed Risk Medical Insurance
Board, established by Sections 12710 and 12710.1 of the Insurance
Code.

end insert begin delete

(g)

end delete

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

begin delete

(h)

end delete

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

begin delete

(i)

end delete

begin insert (j) 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.

SEC. 2.  

Section 100506.1 is added to the Government Code,
to read:

100506.1.  

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

(a)  begin delete An end delete begin insert Any end insert action or inaction related to the individual’s
eligibility for begin insert or enrollment in end insert a state health subsidy program, or
for advance payment of premium tax credits and cost-sharing
reductions, begin insert or end insert 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 begin insert or an enrollment determination end insert .

SEC. 3.  

Section 100506.2 is added to the Government Code,
to read:

100506.2.  

(a) The entity making begin delete a end delete begin insert an eligibility or enrollment end insert
determination begin delete of eligibility end delete described in Section 100506.1 shall
provide notice of the appeals process at the time of application
and begin delete determination end delete begin insert at the time end insert of eligibility begin insert or enrollment
determination end insert .

(b) The entity making begin delete a end delete begin insert an eligibility or enrollment end insert
determination begin delete of eligibility end delete 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 begin delete Regulations, that end delete
begin insert Regulations. The combined eligibility notice end insert 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 begin insert all of end insert 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 begin insert eligibility end insert determination begin insert or the
date of enrollment end insert .

(3) An explanation that the applicant or enrollee may appeal begin delete an end delete
begin insert any end insert action or inaction related to an individual’s eligibility for begin insert or
enrollment in end insert a state health subsidy program with which the
applicant or enrollee is dissatisfied by requesting a begin insert state fair end insert
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 begin delete may end delete begin insert shall end insert be maintained or
reinstated pending an appeal decision, pursuant to Section
100506.5.

SEC. 4.  

Section 100506.3 is added to the Government Code,
to read:

100506.3.  

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 begin insert or enrollment end insert
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.

SEC. 5.  

Section 100506.4 is added to the Government Code,
to read:

100506.4.  

(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 begin insert or enrollment end insert
determination begin insert , unless there is good cause as provided in Section
10951 of the Welfare and Institutions Code end insert .

(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
begin insert commonly available end insert electronic begin delete media, end delete begin insert means, end insert 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, begin insert through other
commonly available electronic means, end insert or by facsimile.

(c) The staff of the begin delete Exchange may end delete begin insert Exchange, the county, or
MRMIB shall end insert 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 begin insert request end insert , the appeals entity shall
send, via secure electronic interface, timely begin delete acknowledgment end delete begin insert notice end insert
of the appeal to the begin delete entity that made the determination of eligibility
being appealed end delete begin insert Exchange and the county and, if related to the
Access for Infants and Mothers or the Healthy Families Program,
MRMIB end insert .

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

begin delete

(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.

end delete

(e) A member of the board, employee of the Exchange, a county,
begin delete the Managed Risk Medical Insurance Board (MRMIB), end delete begin insert MRMIB, end insert
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:

begin insert

(1) A representative of the Exchange, the county, or MRMIB
shall contact the appellant and offer to discuss the determination
with the appellant if he or she agrees.

end insert begin delete

(1)

end delete

begin insert (2) end insert  The appellant’s right to a hearing shall be preserved if the
appellant is dissatisfied with the outcome of the informal resolution
process. begin insert The appellant or the authorized representative may
withdraw the hearing request voluntarily or may agree to a
conditional withdrawal that shall list the agreed-upon conditions
that the appellant and the Exchange, county, or MRMIB shall
meet. end insert

begin delete

(2)

end delete

begin insert (3) end insert  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.

begin delete

(3)

end delete

begin insert (4) end insert  The informal resolution process shall not delay the timeline
for a provision of a hearing.

begin insert

(5) The informal resolution process is voluntary and neither an
appellant’s participation nor nonparticipation in the informal
resolution process shall affect the right to a hearing under this
section.

end insert begin delete

(4)

end delete

begin insert (6) end insert  For eligibility begin insert or enrollment end insert 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 begin delete eligibility end delete 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.

begin delete

(5)

end delete

begin insert (7) end insert  The staff involved in the informal resolution process shall
try to resolve the issue through a review of case documents, begin insert in
person or through electronic means as desired by the appellant, end insert
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.

begin delete

(6)

end delete

begin insert (8) end insert  The informal resolution process set forth by the State
Department of begin delete Health Care Service’s end delete begin insert Social Services end insert begin insert ’ end insert 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. begin insert The notice shall include the right of the
appellant to request that the hearing be held via telephone or video
conference and include instructions for submitting the request on
the notice, by telephone or through other commonly available
electronic means. end insert

(3) The format of the hearing begin delete may be telephonic, video
teleconference, or in person. end delete begin insert shall be in person, unless the appellant
requests the hearing be held telephonically or via video conference
pursuant to paragraph (2). end insert

(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 begin insert or
enrollment end insert determination or any prior appeal decision in the same
matter.

(6) The appellant shall have the opportunity to review his or
her appeal record begin insert , case file, end insert 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 begin delete , or as soon as administratively feasible, end delete and shall
be based exclusively on the application of the begin insert applicable laws and end insert
eligibility begin insert and enrollment end insert rules to the information used to make
the eligibility begin insert or enrollment end insert 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 begin insert or enrollment end insert , 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 begin insert eligibility
or enrollment end insert determination begin delete of eligibility end delete 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. begin insert Appeal to the federal Department of Health and
Human Services is not a prerequisite for seeking judicial review. end insert

(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.

SEC. 6.  

Section 100506.5 is added to the Government Code,
to read:

100506.5.  

For appeals of begin delete redeterminations end delete begin insert redetermination of
Exchange advance premium tax credits or cost end insert begin insert -sharing reductions end insert ,
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 begin insert for the same level of
advance premium tax credits or costing end insert begin insert -sharing reductions end insert while
the appeal is pending in accordance with the level of eligibility
immediately before the redetermination being appealed.