BILL NUMBER: AB 617 CHAPTERED
BILL TEXT
CHAPTER 869
FILED WITH SECRETARY OF STATE SEPTEMBER 30, 2014
APPROVED BY GOVERNOR SEPTEMBER 30, 2014
PASSED THE SENATE AUGUST 26, 2014
PASSED THE ASSEMBLY AUGUST 27, 2014
AMENDED IN SENATE AUGUST 22, 2014
AMENDED IN SENATE AUGUST 19, 2014
AMENDED IN SENATE AUGUST 4, 2014
AMENDED IN SENATE AUGUST 13, 2013
AMENDED IN ASSEMBLY APRIL 15, 2013
AMENDED IN ASSEMBLY MARCH 19, 2013
INTRODUCED BY Assembly Member Nazarian
FEBRUARY 20, 2013
An act to add Sections 100501.1, 100506.1, 100506.2, 100506.3,
100506.4, and 100506.5 to the Government Code, and to amend Sections
10950, 10951, and 10960 of the Welfare and Institutions Code,
relating to health care coverage.
LEGISLATIVE COUNSEL'S DIGEST
AB 617, 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 board of the Exchange to establish an appeals process
for prospective and current enrollees of the Exchange that complies
with all of the 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 board of the Exchange to contract with
the State Department of Social Services to serve as the Exchange
appeals entity designated to hear appeals of eligibility or
enrollment determination or redetermination for persons in the
individual market or exemption determinations within the Exchange's
jurisdiction. The bill would establish an appeals process for
eligibility or enrollment determinations and redeterminations for
insurance affordability programs, as defined, or exemption
determinations within the Exchange's jurisdiction, 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 a process for continuing
eligibility for individuals during the appeals process. The bill
would make other related changes, and would specify that certain
provisions only be implemented to the extent they do not conflict
with federal law.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 100501.1 is added to the Government Code, to
read:
100501.1. For purposes of this title, the following definitions
shall apply:
(a) "Insurance affordability program" means a program that is one
of the following:
(1) The state's Medi-Cal program under Title XIX of the federal
Social Security Act (42 U.S.C. Sec. 1396 et seq.).
(2) The state's children's health insurance program (CHIP) under
Title XXI of the federal Social Security Act (42 U.S.C. Sec. 1397aa
et seq.).
(3) A program that makes available to qualified individuals
coverage in a qualified health plan through the Exchange with advance
payment of the premium tax credit established under Section 36B of
the Internal Revenue Code.
(4) A program that makes available coverage in a qualified health
plan through the Exchange with cost-sharing reductions established
under Section 1402 of the federal act.
(b) "Combined eligibility notice" means an eligibility notice that
informs an individual, or multiple family members of a household, of
eligibility for each of the insurance affordability programs and for
enrollment in a qualified health plan through the Exchange, for
which a determination of eligibility was made.
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) Any action or inaction related to the individual's eligibility
for or enrollment in an insurance affordability program, or for
advance payment of premium tax credits and cost-sharing reductions,
or 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 or adequate notice of an
eligibility determination or redetermination or an enrollment-related
determination.
SEC. 3. Section 100506.2 is added to the Government Code, to read:
100506.2. (a) The entity making an eligibility or enrollment
determination described in Section 100506.1 shall provide notice of
the appeals process at the time of application and at the time of
eligibility or enrollment determination or redetermination.
(b) The entity making an eligibility or enrollment determination
described in Section 100506.1 shall also issue a combined eligibility
notice after the Director of Health Care Services determines in
writing that the California Healthcare Eligibility, Enrollment, and
Retention System (CalHEERS) has been programmed for the
implementation of this section, but no later than July 1, 2017. The
combined eligibility notice shall contain all of the following:
(1) Information about eligibility or ineligibility for Medi-Cal,
premium tax credits and cost-sharing reductions, and, if applicable,
for the Medi-Cal Access Program, for each individual, or multiple
family members of a household, that has applied, including all of the
following:
(A) An explanation of the action reflected in the notice,
including the effective date of the action.
(B) Any factual bases upon which the decision is made.
(C) Citations to, or identification of, the legal authority
supporting the action.
(D) Contact information for available customer service resources,
including local legal aid and welfare rights offices.
(E) 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 eligibility determination or the date of
enrollment, which may be included with the notice in a separate
document.
(3) An explanation that the applicant or enrollee may appeal any
action or inaction related to an individual's eligibility for or
enrollment in an insurance affordability program with which the
applicant or enrollee is dissatisfied by requesting a state fair
hearing consistent with this title 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 shall be maintained or reinstated pending
an appeal decision, pursuant to Section 100506.5.
(c) This section shall be implemented only to the extent it does
not conflict with federal law.
SEC. 4. Section 100506.3 is added to the Government Code, to read:
100506.3. (a) 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 or enrollment
determination or redetermination for persons in the individual
market, or exemption determinations within the Exchange's
jurisdiction. To the extent applicable, the provisions of this title,
Subpart F of Part 155 of Title 45 of the Code of Federal
Regulations, and Article 7 of Chapter 12 of Title 10 of the
California Code of Regulations shall govern the Exchange hearing
process. If those provisions are not applicable, 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 shall
govern the Exchange hearing process.
(b) This section shall be implemented only to the extent it does
not conflict with federal law.
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 or enrollment
determination, or exemption determination within the Exchange's
jurisdiction, unless there is good cause as provided in Section 10951
of the Welfare and Institutions Code.
(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 as
expeditiously as possible, but no later than five working days after
the hearing, unless the appellant agrees to a delay to submit
additional documents for the appeals record. If an expedited appeal
is denied, the appeals entity shall notify the appellant within three
days by telephone or through other commonly available secure
electronic means, to be followed by a notice in writing, within five
working days 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, through other
commonly available electronic means, or by facsimile.
(c) The staff of the Exchange, the county, or the State Department
of Health Care Services or its designee shall 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 may be subject to reconciliation if the appeal
is unsuccessful, an explanation that the appellant may participate
in informal resolution pursuant to subdivision (g), information
regarding how to initiate informal resolution, and an explanation
that the appellant shall have the opportunity to review his or her
entire eligibility file, including information on how an income
determination was made and all papers, requests, documents, and
relevant information in the possession of the entity that made the
decision that is the subject of the appeal at any time from the date
on which an appeal request is filed to the date on which the appeal
decision is issued.
(2) Upon receipt of an appeal request, the appeals entity shall
send, via secure electronic means, timely notice of the appeal to the
Exchange and the county, and the State Department of Health Care
Services or its designee if applicable.
(3) Upon receipt of the notice of appeal from the appeals entity,
the entity that made the determination of eligibility or enrollment
being appealed shall transmit, either as a hardcopy or
electronically, the appellant's eligibility and enrollment records
for use in the adjudication of the appeal to the appeals entity.
(e) A member of the board, employee of the Exchange, a county, the
State Department of Health Care Services or its designee, or the
appeals entity shall not limit or interfere with an applicant's 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) A representative of the entity that made the eligibility or
enrollment determination shall contact the appellant or the appellant'
s appropriately authorized representative and offer to discuss the
determination with the appellant if he or she agrees.
(2) The appellant's right to a hearing shall be preserved if the
appellant is dissatisfied with the outcome of the informal resolution
process. 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 the State Department of Health
Care Services or its designee shall meet.
(3) 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, enrollment, or informal resolution processes.
(4) The informal resolution process shall not delay the timeline
for a provision of a hearing.
(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.
(6) For eligibility or enrollment determinations for insurance
affordability programs based on modified adjusted gross income
(MAGI), the appellant or the appellant's appropriately authorized
representative may initiate the informal resolution process with the
entity that made the 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 eligibility or enrollment decisions.
(C) The State Department of Health Care Services or its designee
shall conduct informal resolution involving issues related to
eligibility or enrollment determinations for programs when the State
Department of Health Care Services is the entity making the
determination.
(7) The staff involved in the informal resolution process shall
try to resolve the issue through a review of case documents, in
person or through electronic means as desired by the appellant, 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.
(8) The informal resolution process set forth by the State
Department of Social Services for Medi-Cal fair hearings shall be
used for the informal resolutions pursuant to this subdivision and
shall require the Exchange, county representative, or the State
Department of Health Care Services or its designee to do the
following:
(A) Review the file to determine the appropriateness of the action
and whether a hearing is needed.
(B) Attempt to resolve the matter if the action was incorrect.
(C) Determine whether a dual agency appeal is required to resolve
the matter at hearing and notice the other agency if not already
included.
(D) Determine whether interpretation services are necessary and
arrange for those services accordingly.
(E) Inform appellants of other agencies that may also be available
to resolve the controversy.
(h) (1) A position statement, as required by Section 10952.5 of
the Welfare and Institutions Code, shall be made available at least
two working days before the hearing on the appeal. The position
statement shall be made available electronically by the entity that
determined eligibility if the entity has the capacity to send
information electronically in a secure manner.
(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. The notice shall explain what format the hearing
shall be held in, via telephone or video conference or in person, and
include the right of the appellant to request that the hearing be
held via telephone or video conference or in person. The notice shall
include instructions for submitting the request on the notice, by
telephone or through other commonly available electronic means.
(3) The hearing format may be held via telephone or video
conference, unless the appellant requests the hearing be held in
person pursuant to paragraph (2).
(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 or
enrollment determination or any prior appeal decision in the same
matter.
(6) The appellant shall have the opportunity to review his or her
appeal record, case file, 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 and shall be based exclusively on the application of
the applicable laws and eligibility and enrollment rules to the
information used to make the eligibility or enrollment 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 or enrollment, 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 at the election of the appellant if the appellant
is otherwise eligible.
(j) Upon adjudication of the appeal, the appeals entity shall
transmit the decision of appeal to the entity that made the
eligibility or enrollment determination via a secure electronic
means.
(k) If an appellant disagrees with the decision of the appeals
entity, he or she may make an appeal request regarding coverage in a
qualified health plan through the Exchange to the federal Department
of Health and Human Services 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. Appeal to the federal Department of Health and Human
Services is not a prerequisite for seeking judicial review, nor
shall seeking an appeal to the federal Department of Health and Human
Services preclude a judicial review.
(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.
(n) This section shall be implemented only to the extent it does
not conflict with federal law.
SEC. 6. Section 100506.5 is added to the Government Code, to read:
100506.5. For appeals of redetermination of Exchange advance
premium tax credits or cost-sharing reductions, 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 for the same level of advance premium
tax credits or cost-sharing reductions while the appeal is pending in
accordance with the level of eligibility immediately before the
redetermination being appealed.
SEC. 7. Section 10950 of the Welfare and Institutions Code is
amended to read:
10950. (a) If any applicant for or recipient of public social
services is dissatisfied with any action of the county department
relating to his or her application for or receipt of public social
services, if his or her application is not acted upon with reasonable
promptness, or if any person who desires to apply for public social
services is refused the opportunity to submit a signed application
therefor, and is dissatisfied with that refusal, he or she shall, in
person or through an authorized representative, without the necessity
of filing a claim with the board of supervisors, upon filing a
request with the State Department of Social Services or the State
Department of Health Care Services, whichever department administers
the public social service, be accorded an opportunity for a state
hearing.
(b) (1) The requirements of Sections 100506.2 and 100506.4 of the
Government Code apply to state hearings regarding eligibility for or
enrollment in an insurance affordability program administered by the
State Department of Health Care Services to the extent that those
sections conflict with the state hearing requirements under this
chapter.
(2) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department, without taking any further regulatory action, shall
implement, interpret, or make specific this subdivision by means of
all-county letters, plan letters, plan or provider bulletins, or
similar instructions until the time regulations are adopted. The
department shall adopt regulations by July 1, 2017, in accordance
with the requirements of Chapter 3.5 (commencing with Section 11340)
of Part 1 of Division 3 of Title 2 of the Government Code.
Notwithstanding Section 10231.5 of the Government Code, beginning
July 1, 2015, the department shall provide a semiannual status report
to the Legislature, in compliance with Section 9795 of the
Government Code, until regulations have been adopted.
(3) This subdivision shall be implemented only to the extent it
does not conflict with federal law.
(c) Priority in setting and deciding cases shall be given in those
cases in which aid is not being provided pending the outcome of the
hearing. This priority shall not be construed to permit or excuse the
failure to render decisions within the time allowed under federal
and state law.
(d) Notwithstanding any other provision of this code, there is no
right to a state hearing when either (1) state or federal law
requires automatic grant adjustments for classes of recipients unless
the reason for an individual request is incorrect grant computation,
or (2) the sole issue is a federal or state law requiring an
automatic change in services or medical assistance which adversely
affects some or all recipients.
(e) For the purposes of administering health care services and
medical assistance, the Director of Health Care Services shall have
those powers and duties conferred on the Director of Social Services
by this chapter to conduct state hearings in order to secure approval
of a state plan under applicable federal law.
(f) The Director of Health Care Services may contract with the
State Department of Social Services for the provisions of state
hearings in accordance with this chapter.
(g) As used in this chapter, "recipient" means an applicant for or
recipient of public social services except aid exclusively financed
by county funds or aid under Article 1 (commencing with Section
12000) to Article 6 (commencing with Section 12250), inclusive, of
Chapter 3 of Part 3, and under Article 8 (commencing with Section
12350) of Chapter 3 of Part 3, or those activities conducted under
Chapter 6 (commencing with Section 18350) of Part 6, and shall
include any individual who is an approved adoptive parent, as
described in subdivision (C) of Section 8708 of the Family Code, and
who alleges that he or she has been denied or has experienced delay
in the placement of a child for adoption solely because he or she
lives outside the jurisdiction of the department.
SEC. 8. Section 10951 of the Welfare and Institutions Code is
amended to read:
10951. (a) A person is not entitled to a hearing pursuant to this
chapter unless he or she files his or her request for the same
within 90 days after the order or action complained of.
(b) (1) Notwithstanding subdivision (a), a person shall be
entitled to a hearing pursuant to this chapter if he or she files the
request more than 90 days after the order or action complained of
and there is good cause for filing the request beyond the 90-day
period. The director may determine whether good cause exists.
(2) For purposes of this subdivision "good cause" means a
substantial and compelling reason beyond the party's control,
considering the length of the delay, the diligence of the party
making the request, and the potential prejudice to the other party.
The inability of a person to understand an adequate and
language-compliant notice, in and of itself, shall not constitute
good cause. The department shall not grant a request for a hearing
for good cause if the request is filed more than 180 days after the
order or action complained of.
(3) This section shall not preclude the application of the
principles of equity jurisdiction as otherwise provided by law.
(c) Notwithstanding the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code), the department shall implement this section
through an all-county information notice no later than January 1,
2008. The department may also provide further instructions through
training notes.
SEC. 9. Section 10960 of the Welfare and Institutions Code is
amended to read:
10960. (a) Within 30 days after receiving the decision of the
director, which is the proposed decision of an administrative law
judge adopted by the director as final, a final decision rendered by
an administrative law judge, or a decision issued by the director
himself or herself, the affected county or applicant or recipient may
file a request with the director for a rehearing. The director shall
immediately serve a copy of the request on the other party to the
hearing and that other party may within five days of the service file
with the director a written statement supporting or objecting to the
request. The director shall grant or deny the request no later than
the 35th working day after the request is made to ensure the prompt
and efficient administration of the hearing process. If the director
grants the request, the rehearing shall be conducted in the same
manner and subject to the same time limits as the original hearing.
(b) The grounds for requesting a rehearing are as follows:
(1) The adopted decision is inconsistent with the law.
(2) The adopted decision is not supported by the evidence in the
record.
(3) The adopted decision is not supported by the findings.
(4) The adopted decision does not address all of the claims or
issues raised by the parties.
(5) The adopted decision does not address all of the claims or
issues supported by the record or evidence.
(6) The adopted decision does not set forth sufficient information
to determine the basis for its legal conclusion.
(7) Newly discovered evidence, that was not in custody or
available to the party requesting rehearing at the time of the
hearing, is now available and the new evidence, had it been
introduced, could have changed the hearing decision.
(8) For any other reason necessary to prevent the abuse of
discretion or an error of law, or for any other reason consistent
with Section 1094.5 of the Code of Civil Procedure.
(c) The notice granting or denying the rehearing request shall
explain the reasons and legal basis for granting or denying the
request for rehearing.
(d) The decision of the director, which is the proposed decision
of an administrative law judge adopted by the director as final, a
final decision rendered by an administrative law judge, or a decision
issued by the director himself or herself, remains final pending a
request for a rehearing. Only after a rehearing is granted is the
decision no longer the final decision in the case.
(e) Notwithstanding any other provision of law, a rehearing
request or decision shall not be a prerequisite to filing an action
under Section 10962.
(f) (1) Notwithstanding subdivision (a), an applicant or recipient
otherwise may be entitled to a rehearing pursuant to this chapter if
he or she files a
request more than 30 days after the decision of the director is
issued, or if he or she did not receive a copy of the decision of the
director, or if there is good cause for filing beyond the 30-day
period. The director may determine whether good cause exists.
(2) For purposes of this subdivision, "good cause" means a
substantial and compelling reason beyond the party's control,
considering the length of the delay, the diligence of the party
making the request, and the potential prejudice to the other party.
The inability of a person to understand an adequate and
language-compliant notice, in and of itself, shall not constitute
good cause. The department shall not grant a request for a rehearing
for good cause if the request is filed more than 180 days after the
order or action complained of.
(3) This section shall not preclude the application of the
principles of equity jurisdiction as otherwise provided by law.
(g) Notwithstanding the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code), the department shall implement this section
through an all-county information notice no later than January 1,
2008. The department may also provide further instructions through
training notes.