BILL ANALYSIS Ó AB 617 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 617 (Nazarian) As Amended August 22, 2014 Majority vote ----------------------------------------------------------------- |ASSEMBLY: |54-24|(May 28, 2013) |SENATE: |25-9 |(August 26, | | | | | | |2014) | ----------------------------------------------------------------- Original Committee Reference: HEALTH SUMMARY : Establishes an appeals process for eligibility determinations for insurance affordability programs (including Medi-Cal and tax credits available through the California Health Benefit Exchange (Exchange), or Covered California) and requires Covered California to contract with the Department of Social Services (DSS) to serve as the designated entity to hear appeals. Specifically, this bill : 1)Applies to eligibility for Medi-Cal, the state's children's health insurance program, federal tax credits that subsidize the purchase of health plans through Covered California, and cost-sharing reductions available for Covered California plans. 2)Requires Covered California to contract with DSS to serve as the appeals entity. Requires the Exchange hearing process, to the extent applicable, to be governed by the provisions of this bill, federal regulations on Exchange appeals, and Covered California's regulations on Exchange appeals. If those provisions are not applicable, requires Medi-Cal hearing process rules to govern appeals hearings. 3)Requires the entity making enrollment or eligibility determinations, including the amounts of tax credits and cost-sharing determinations, to provide notice of the appeals process at the time of application and at the time of determination or redetermination of eligibility. 4)Specifies deadlines and time lines to request an appeal and establishes an expedited appeals process for situations where there is immediate need for health services. 5)Provides for the opportunity for an informal resolution prior AB 617 Page 2 to the hearing as specified, and prohibits the informal resolution process from being mandatory, delaying the timeline for provision of a hearing, or having an effect on the right to a hearing. The Senate amendments : 1)Require a combined eligibility notice to be sent only after DHCS determines in writing that the California Healthcare Eligibility, Enrollment, and Retention System (CalHEERS) has been programmed for the implementation of this bill. 2)Clarify that notice of the appeals process must be provided at the time of redetermination of eligibility, in addition to the time of initial determination. 3)Require expedited appeals to be decided within five working days, rather than three, and require notice of a denied expedited appeal within three working days, rather than two. 4)Replace references to the Managed Risk Medical Insurance Board (MRMIB) with the Department of Health Care Services (DHCS) to reflect the elimination of MRMIB and the transition of its functions to DHCS. 5)Requires the informal resolution process to require the entity that determined eligibility to review the appellant's file, attempt to resolve the matter, determine whether interpretation services are needed, and inform appellants of other agencies that may be able to resolve the issue, and make other determinations about the need for a hearing. 6)Delete a requirement that hearings be held in person unless the appellant requests otherwise, and instead allows hearings to be held via telephone or video conference unless the appellant requests that the hearing be held in person. 7)Clarify that an appellant's appeal to the federal Department of Health and Human Services does not preclude judicial review. 8)Provide that this bill shall be implemented only to the extent that it does not conflict with federal law. 9)Make numerous additional minor and technical changes. AB 617 Page 3 FISCAL EFFECT : According to the Senate Appropriations Committee: 1)Annual costs of $630,000 for additional staff to perform expedited appeal hearings (General Fund and federal funds). This bill authorizes applicants to request an expedited appeal, which requires a decision to be issued within five days. By accelerating the appeals timeline, this bill will increase administrative workload to DSS. 2)One-time administrative costs in the low hundreds of thousands to develop and adopt regulations to implement the requirements of this bill (General Fund and federal funds). COMMENTS : According to the author, 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 states, 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 is intended to ensure 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's expansion of access to health insurance began in 2014 with a coordinated system of insurance affordability programs, including Medicaid (known as Medi-Cal in California), the Children's Health Insurance Program (which includes certain children and pregnant mothers in, tax credits (which apply directly to a consumer's premium payment each month) for coverage provided through exchanges, and optional state-established Basic Health Plans. It also provides for coordinated, streamlined enrollment processes for these programs. State Medicaid agencies are required to enter into agreements with the Exchange and other insurance affordability programs to coordinate eligibility determinations and enrollment. In addition to having a streamlined eligibility and enrollment application system, the ACA and its implementing regulations AB 617 Page 4 require states to have coordinated notice and appeal procedures. The federal Centers for Medicare and Medicaid Services issued final regulations governing exchanges effective September 30, 2013. These regulations covered, among other things, fair hearing and appeals processes for Medicaid and exchange eligibility and enrollment appeals. In June 2014, Covered California adopted regulations on the eligibility and enrollment appeals process for California. The provisions of this bill, which were developed in coordination with DHCS, DSS, and Covered California, are generally similar to those regulations. Western Center on Law and Poverty, the sponsor of this bill, writes in support that the ACA requires a new seamless and coordinated eligibility and enrollment system for the health insurance affordability programs. DHCS and the Exchange are working to realize this vision by overseeing the building of CalHEERS 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 be coordinated. Western Center argues that, while Covered California has adopted regulations on the appeals process, something as important as due process rights belongs in statute. There is no opposition on file. Analysis Prepared by : Ben Russell / HEALTH / (916) 319-2097 FN: 0005475