BILL ANALYSIS �
AB 617
Page 1
ASSEMBLY THIRD READING
AB 617 (Nazarian)
As Amended April 15, 2013
Majority vote
HEALTH 13-6 APPROPRIATIONS 12-5
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|Ayes:|Pan, Ammiano, Atkins, |Ayes:|Gatto, Bocanegra, |
| |Bonilla, Bonta, Chesbro, | |Bradford, |
| |Gomez, | |Ian Calderon, Campos, |
| |Roger Hern�ndez, | |Eggman, Gomez, Hall, |
| |Lowenthal, Mitchell, | |Ammiano, Pan, Quirk, |
| |Nazarian, V. Manuel | |Weber |
| |P�rez, Wieckowski | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Logue, Maienschein, |Nays:|Harkey, Bigelow, |
| |Mansoor, Nestande, | |Donnelly, Linder, Wagner |
| |Wagner, Wilk | | |
| | | | |
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SUMMARY : Establishes an applicant's or enrollee's right to
appeal actions, inaction, or decisions made by the California
Health Benefit Exchange (Exchange), now known as Covered
California, that relate to enrollment, eligibility, or
ineligibility for a state health subsidy program, for advance
payment of the premium tax credits (APTC), and cost-sharing
reductions, the amount of the APTC or cost-sharing or
eligibility for affordable plan options. Includes right to
appeal the determination of an exemption from penalties for
failing to meet minimum standards for obtaining health care
coverage and failure to provide timely notices as specified.
Specifically, this bill :
1)Requires Covered California to contract with the Department of
Social Services (DSS) to serve as the appeals entity to hear
appeals of enrollment, eligibility determinations, or
redeterminations for persons obtaining coverage in the
individual market. Requires, unless otherwise provided,
Medi-Cal hearing process rules to govern.
2)Requires the entity making enrollment or eligibility
determinations, including the amounts of APTC and cost-sharing
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determinations to provide notice of the appeals process at the
time of enrollment, application, and determination of
eligibility.
3)Requires the entity making the enrollment or eligibility
determinations, to issue a combined eligibility notice, as
specified in federal regulations and specifies the information
that shall be included.
4)Specifies deadlines and time lines to request an appeal,
establishes an expedited appeals process, allows appeals to be
requested by telephone, by mail, through the Internet, by
commonly available electronic means, or by facsimile, requires
the staff of the Exchange, the county, and the Managed Risk
Medical Insurance Board (MRMIB) to assist the applicant or
enrollee in making the appeal request, requires the appeals
entity to send acknowledgement in a timely manner, as
specified and allows an applicant or enrollee to be
represented by counsel or designate an authorized
representative to act on his or her behalf.
5)Requires DSS, upon receipt of an appeals request, to notify
the Exchange and the county and, if related to the Access for
Infants and Mothers Program (AIM) to MRMIB via secure
electronic interface and requires the entity that made the
eligibility or enrollment determination to transmit the
eligibility record for use in the adjudication, as specified.
6)Provides for the opportunity for an informal resolution prior
to the hearing as specified, prohibits the informal resolution
process from being mandatory, delaying the timeline for
provision of a hearing, and having an effect on the right to a
hearing.
7)Requires a position statement, if required of a public or
private agency by regulation or if the public or private
agency chooses, concerning the issues in question, to be
electronically available at least two working days before the
hearing on the appeal.
8)Requires notice of the hearing, with date, time and location,
as specified, to the appellant no later than 15 days prior to
the hearing date. Requires reasonable efforts to allow
participation of the appellant and requires notice that the
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appellant may request the hearing to be held via telephone or
video conference and instructions for submitting the request
by telephone or other commonly available electronic means.
9)Requires the format of the hearing to be in person unless the
person requests the hearing be held telephonically or via
video teleconference, requires the hearing to 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, requires the
appellant to be allowed 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.
10)Requires decisions to be made within 90 days from the date
the appeal is filed, and based exclusively on the application
of the applicable laws, enrollment and eligibility rules to
the information used to make decisions, as well as, any other
information provided by the appellant during the course of the
appeal.
11)Requires the content of the decision of appeal to 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.
12)Provides that an appellant may also seek judicial review
to the extent provided by law regardless of an appeal to
federal Department of Health and Human Services.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)Major costs, in the tens of millions of dollars, for the DSS
State Hearings Division to modify current appeals system and
increase staff. Actual costs are dependent on caseload with
an assumption of a 2.5% appeal rate. Potentially significant
costs for the Department of Health Care Services (DHCS),
MRMIB, and Covered California to coordinate with DSS.
2)Potential General Fund (GF) offsets from federal grant funding
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for Covered California (through the end of 2014), health plan
fees, and federal matching funds for Medi-Cal and AIM
programs.
COMMENTS : According to the author this bill establishes a "no
wrong door" appeals procedure for both Exchange and the Modified
Adjusted Gross Income (MAGI) eligibility standard and enrollment
determinations for Medi-Cal. This bill is also intended to
establish an equitable notice procedure by requiring the entity
that made the determination, either the Exchange or the
counties, to provide to the applicant, a notice on appeal
options available. The author states that this bill ensures the
overall purpose of the federal Patient Protection and Affordable
Care Act (ACA) is achieved; that people are enrolled and
receiving benefits from healthcare coverage programs they can
afford. The author argues, consistent with the goal of the ACA,
this bill implements a coordinated, statewide approach on
appeals to facilitate the process and to seamlessly enroll
consumers in health coverage. This bill ensures that no matter
where a consumer decides to apply for coverage there is a
defined process in place as to next steps, should they need to
appeal a decision. The author states that this bill also
includes an informal resolution process, as specified by the ACA
to avoid going to hearing when possible.
The ACA increases access to health insurance beginning in 2014
through a coordinated system of "insurance affordability
programs," including Medicaid, the Children's Health Insurance
Program (CHIP), APTCs for coverage provided through new
exchanges, and optional state-established Basic Health Plans.
It also provides for coordinated, streamlined enrollment
processes for these programs. As required by the ACA, Medicaid
financial eligibility for most groups will be based on MAGI, as
defined in the Internal Revenue Code. The rule generally adopts
MAGI household income counting methods, eliminating various
income disregards currently used by states. Eligibility for the
insurance affordability programs at the Exchange will begin with
a MAGI screen. If an individual is not found eligible for a
MAGI group, the state must collect necessary information and
determine eligibility under all other Medicaid eligibility
categories (i.e., MAGI-exempt groups, such as disability) and
potential eligibility for APTC in an Exchange. State Medicaid
agencies are to enter into one or more agreements with an
Exchange and other insurance affordability programs to
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coordinate eligibility determinations and enrollment.
The ACA requires states to have a single streamlined application
for Exchange subsidies, their Medicaid programs, and their
Children's Health Insurance Programs. California has
established Covered California, as a state-based exchange that
is operating as an independent government entity with a
five-member Board of Directors. AB 1602 (John A. P�rez),
Chapter 655, Statutes of 2010, and SB 900 (Alquist), Chapter
659, Statutes of 2010, created the structure and basic duties of
the Exchange but did not specify particulars of an appeals
process when consumers disagreed with an eligibility
determination by the Exchange. AB 1602 stated that the Exchange
should develop an appeals process once federal guidance was
issued. At recent Exchange Board of Directors meetings, Covered
California discussed their intent to promulgate eligibility and
enrollment regulations and has issued an initial draft. The
section on appeals is currently "reserved." The legislation
authorizing the Exchange gave it emergency regulatory authority
until January 1, 2016.
In addition to having a streamlined eligibility and enrollment
application system, the ACA and its implementing regulations
require states to have coordinated notice and appeal procedures.
CMS issued proposed regulations governing exchanges on January
22, 2013, and requested comments be submitted by February 13,
2013. These proposed regulations covered, among other things,
fair hearing and appeals processes for Medicaid and exchange
eligibility and enrollment appeals. An individual is not
eligible for APTCs if they are eligible for Medi-Cal and
eligibility for APTCs starts exactly where eligibility for
Medi-Cal ends. The preamble notes that the proposed regulations
are intended to maximize coordination of appeals involving the
different insurance affordability programs and minimize burden
on consumers and states. Specifically, preamble proposes that
the Medicaid agency treat an appeal of a determination of
eligibility for enrollment in a Qualified Health Plan in the
Exchange and for APTC or cost-sharing reductions as a request
for a fair hearing of the denial of Medicaid. The preamble
further states that this is intended to avoid the need for an
individual to request multiple appeals. The major options the
proposed regulations leave up to states is: 1) whether and
which entity to designate as an "exchange appeals entity"; 2)
what entity issues the combined notices; and, c) whether and
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which entity should engage in an informal resolution process to
try to resolve the case before it reaches the hearing. States
that exercise the option to delegate authority to conduct
Medicaid fair hearings to an Exchange must give the individual
the option to opt for a fair hearing before the Medicaid agency.
Furthermore, the preamble makes clear the same due process
rights apply when delegated to the Exchange and the Medicaid
agency would continue to exercise appropriate oversight
authority and take corrective actions if necessary.
Western Center on Law and Poverty (WCLP), the sponsor of this
bill, writes in support that the ACA requires a new seamless and
coordinated eligibility and enrollment system for Medi-Cal, the
Exchange, and AIM. DHCS and the Exchange are working to realize
this vision - overseeing the building of the California
Healthcare Eligibility, Enrollment and Retention System to be
the online application for public health coverage programs as
well as providing for in-person, phone, and mail application
venues. Just as the application processes must be coordinated,
federal law also requires that notices and appeals for the
Exchange, "MAGI Medi-Cal", and AIM be coordinated. According to
WCLP, federal regulations also require that exchange appeals
conform to Medicaid fair hearing requirements. WCLP argues that
legislation is needed to specify those notice and appeals
procedures. WCLP further states that while Covered California
is working on eligibility and enrollment regulations which it
has the authority to promulgate under its authorizing
legislation, it feels something as important as due process
rights belong in statute. Moreover, because the appeals process
for the new combined application affects both Medi-Cal and AIM
in addition to the Exchange, Medi-Cal and AIM notices and
appeals should not be governed by Exchange regulations.
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097
FN: 0000825