BILL ANALYSIS Ó AB 2299 Page A Date of Hearing: April 29, 2014 ASSEMBLY COMMITTEE ON HUMAN SERVICES Mark Stone, Chair AB 2299 (Nazarian) - As Amended: March 28, 2014 SUBJECT : Developmental services: health insurance copayments SUMMARY : Requires a regional center to pay applicable copayment, coinsurance, and deductibles needed to ensure a regional center consumer can receive necessary services and supports identified in his or her individual program plan (IPP) or individualized family service plan (IFSP). Specifically, this bill : 1)Requires a regional center to pay the applicable coinsurance, copayment, or deductible associated with services in the consumer's IPP or IFSP that are paid for, in whole or in part, by the health care service plan or health insurance policy of the consumer or the consumer's parent, guardian, or caregiver or the adult consumer, provided that the consumer is covered by his or her own health care service plan or insurance policy, or that of his or her parent, guardian, or caregiver, and provided that no other third party has liability for the cost of the service or support, as specified. 2)Deletes the requirement that a regional center only pay an applicable copayment or coinsurance if the consumer or the consumer's family's gross income is less than 400% of the federal poverty level, and deletes the associated requirements to self-certify gross income information or provide regional centers with information related to changes in income that would cause a change in eligibility for regional center payment of a copayment or coinsurance. 3)Deletes the requirement that, in cases where the gross income of the consumer or the consumer's family exceeds 400% of the federal poverty level, a regional center only pay an applicable copayment or coinsurance for a consumer if the payment is necessary to maintain a child at home or an adult consumer in the least restrictive setting and the parents or consumer meet certain hardship criteria, as specified. 4)Deletes the prohibition against a regional center paying a AB 2299 Page B health care service plan or health insurance policy deductible. 5)Provides that a regional center may directly provide a service or support in lieu of paying a copayment, coinsurance, or deductible if the cost of a copayment, coinsurance, or deductible exceeds the cost of directly providing the associated service or support. EXISTING LAW 1)Establishes an entitlement to services for individuals with developmental disabilities under the Lanterman Developmental Disabilities Services Act (Lanterman Act). (WIC 4500 et seq.) 2)Grants all individuals with developmental disabilities, among all other rights and responsibilities established for any individual by the United States Constitution and laws and the California Constitution and laws, the right to treatment and habilitation services and supports in the least restrictive environment. (WIC 4502) 3)Establishes a system of 21 nonprofit regional centers throughout the state to identify needs and coordinate services for eligible individuals with developmental disabilities and requires the Department of Developmental Services (DDS) to contract with regional centers to provide case management services and arrange for or purchase services that meet the needs of individuals with developmental disabilities, as defined. (WIC 4620 et seq.) 4)Requires the development of an IPP for each regional center consumer, which specifies services to be provided to the consumer, based on his or her individualized needs determination and preferences, and defines that planning process as the vehicle to ensure that services and supports are customized to meet the needs of consumers who are served by regional centers. (WIC 4512) 5)Requires the IPP planning processes to include: a) A statement of the individual's goals and objectives, a schedule of the type and nature of services to be provided and other information and considerations, as specified; AB 2299 Page C b) Review and modification, as necessary, by the regional center's planning team no less frequently than every three years; and c) Statewide training and review of the IPP plan creation, as specified. (WIC 4646.5) 1)Establishes that an infant or toddler under age 3 who is eligible for regional center services shall have an IFSP to direct services, as specified, and defines the types of services, supports and staffing that should be considered when creating the plan. (GOV 95020) 2)Authorizes regional centers to solicit an individual or agency through a request for proposals or other means to provide needed services or supports not presently available, provided it is necessary to expand the availability of needed services of good quality. (WIC 4648(e)(1)) 3)Prohibits a regional center from providing direct treatment and therapeutic services to a consumer and instead requires the utilization of appropriate public and private community agencies and service providers to obtain those services for its consumers, except in emergency situations. (WIC 4648 (f)) 4)Requires regional centers to provide the consumer, his or her parent, legal guardian, or other appropriate authorized representative, as specified, at least annually, a statement of services and supports the regional center purchased, for the purpose of ensuring that the services are delivered. (WIC 4648(h)) 1)Requires regional centers to identify and pursue all possible sources of funding for consumers receiving regional center services, as specified. (WIC 4659 (a) and (b)) 2)Prohibits a regional center from purchasing a service that would otherwise be available from a health care service plan or private insurance when a consumer or family meets the criteria for coverage but chooses not to pursue that coverage. (WIC 4659 (c)) 3)Requires health care service plan contracts and health insurance policies to cover behavioral health treatment for pervasive developmental disorder or autism, as specified, and AB 2299 Page D provides that coverage for such treatment shall not affect services for which a regional center consumer is otherwise eligible. (H&S 1374.73, INS 10144.51) 4)Authorizes a regional center to, when it is necessary to ensure a consumer receives a service or support, pay the coinsurance or copayment associated with services in the consumer's IPP or IFSP that are paid for, in whole or in part, by the health care service plan or health insurance policy of the consumer's parent, guardian, or caregiver or the adult consumer, provided that the gross income of the family or the consumer does not exceed 400% of the federal poverty level and other specified criteria are met. (WIC 4659.1 (a) and (b)) 5)Authorizes a regional center to, when it is necessary to ensure a consumer receives a service or support, pay the coinsurance or copayment associated with services in the consumer's IPP or IFSP that are paid for, in whole or in part, by the health care service plan or health insurance policy of the consumer's parent, guardian, or caregiver or the adult consumer, in cases where the gross income of the family or the consumer exceeds 400% of the federal poverty level if the service or support is necessary to successfully maintain the child at home or the adult consumer in the least-restrictive setting and other specified criteria are met. (WIC 4659.1 (c)) 6)Requires the parent, guardian, or caregiver of a consumer, or an adult consumer with a health care service plan or health insurance policy to self-certify the family's gross annual income to the regional center, as specified, and to notify the regional center when a change in income occurs that would change in the consumer's eligibility for regional center payment of copayments or coinsurance. (WIC 4659.1 (d) and (e)) 7)Prohibits regional centers from paying health care service plan or health insurance policy deductibles. (WIC 4659.1 (g)) FISCAL EFFECT : Unknown COMMENTS : This bill seeks to ensure regional center consumers have full access to services and supports included in their IPPs and IFSPs that are covered by health care service plans or health insurance policies by requiring regional centers to pay AB 2299 Page E for a consumer's applicable copayment, coinsurance, or deductible payment, regardless of the consumer's financial situation. Background : The Lanterman Act guides the provision of services and supports for Californians with developmental disabilities. Each individual under the Act, typically referred to as a "consumer," is legally entitled to treatment and habilitation services and supports in the least restrictive environment. Lanterman Act services are designed to enable all consumers to live more independent and productive lives in the community. The term "developmental disability" means a disability that originates before an individual attains 18 years of age, is expected to continue indefinitely, and constitutes a substantial disability for that individual. It includes intellectual disabilities, cerebral palsy, epilepsy, and pervasive developmental disorder/autism spectrum disorder (PDD/ASD). Other developmental disabilities are those disabling conditions similar to an intellectual disability that require treatment (i.e., care and management) similar to that required by individuals with an intellectual disability. This does not include conditions that are solely psychiatric or physical in nature, and the conditions must occur before age 18, result in a substantial disability, be likely to continue indefinitely, and involve brain damage or dysfunction. Examples of conditions might include intracranial neoplasms, degenerative brain disease or brain damage associated with accidents. Direct responsibility for implementation of the Lanterman Act service system is shared by the Department of Developmental Services (DDS) and 21 regional centers, which are private nonprofit entities, established pursuant to the Lanterman Act, that contract with DDS to carry out many of the state's responsibilities under the Act. The principal roles of regional centers include intake and assessment, individualized program plan development, case management, and securing services through generic agencies or purchasing services provided by vendors. Regional centers also share primary responsibility with local education agencies for provision of early intervention services under the California Early Intervention Services Act. Regional centers : The 21 regional centers throughout the state serve over 260,000 consumers who receive services such as residential placements, supported living services, respite care, AB 2299 Page F transportation, day treatment programs, work support programs, and various social and therapeutic services and activities. Approximately 1,300 consumers reside at one of California's four Developmental Centers-and one state-operated, specialized community facility-which provide 24-hour habilitation and medical and social treatment services. Services provided to people with developmental disabilities are determined through an individual planning process. Under this process, planning teams-which include, among others, the consumer, his or her legally authorized representative, and one or more regional center representatives-jointly prepare an Individual Program Plan (IPP) based on the consumer's needs and choices. The Lanterman Act requires that the IPP promote community integration and maximize opportunities for each consumer to develop relationships, be part of community life, increase control over his or her life, and acquire increasingly positive roles in the community. The IPP must give the highest preference to those services and supports that allow minors to live with their families and adults to live as independently as possible in the community. Autism Spectrum Disorders : Defined as a group of neurodevelopmental disorders linked to atypical biology and chemistry in the brain that generally appears within the first three years of life, autism is a growing epidemic among children. While there are many "autisms," the diagnosis is often characterized by delayed, impaired or otherwise atypical verbal and social communication skills, sensitivity to sensory stimulation, atypical behaviors and body movements, and sensitivity to changes in routines. Although symptoms and severity differ among individuals with an autism diagnosis, all individuals affected by the disorder have impaired communication skills, difficulties initiating and sustaining social interactions and restricted, repetitive patterns of behavior and/or interests. Autism spectrum disorder (ASD), is one of the commonly-used terms to describe the various "autisms" and other pervasive developmental disorders (PDD), and it more appropriately captures the array of symptoms and varying levels in the severity of symptoms experienced by individuals with a diagnosis within ASD. Information released in March 2014 by the Centers for Disease Control (CDC) Autism and Developmental Disabilities Monitoring (ADDM) Network, estimates prevalence of ASD for children born in AB 2299 Page G 2002 and surveyed in 2010 to be 14.7 per 1,000 children, which translates to one in 68 children. This is a drastic increase from CDC data for children born in 2000 and surveyed in 2008, which estimated the prevalence of children with ASD to be one in 88. Average prevalence for children surveyed in 2006 was one in 110 children. ASD continues to be five times more prevalent for boys than for girls.<1> March 2014 DDS data shows that 65,706 regional center consumers have an autism diagnosis, which is more than double the number of individuals with the same diagnosis served by regional centers in 2006. An additional 4,562 regional center consumers are on the autism spectrum with a diagnosis of pervasive developmental disorder (PDD). Among the individuals with ASD/PDD served by the regional centers, 12,481 are female and 57,787 are male, and nearly 40% of the population with an autism or PDD diagnosis is 0 to 9 years old.<2> Insurance coverage of behavioral health treatment for autism : In 2011, Governor Brown signed SB 946 (Steinberg), Chapter 650, Statute of 2011, which required health care service plans and health insurance companies in California to begin covering behavioral health treatment for pervasive developmental disorders or autism by July 1, 2012. State law defines behavioral health treatment, for purposes of the coverage mandate, as professional services and treatment programs, including applied behavior analysis (ABA) and evidence-based behavior intervention programs, that develop or restore, to the maximum extent practicable, the functioning of an individual with pervasive developmental disorder or autism and that meet specified criteria related to who prescribes and provides the treatment. The delivery of behavioral health treatment is varied based on a consumer's needs and can be delivered in a one-to-one or small group format based on the appropriateness for the individual(s) being treated. The coverage mandate resulted in savings to the state, as regional centers were required to purchase most behavioral health services provided for in consumers' IPPs and IFSPs prior to passage of the mandate. As insurers and health plans began paying for services pursuant to SB 946 requirements, some families reported their inability --------------------------- <1> http://www.cdc.gov/ncbddd/autism/data.html <2> http://www.dds.ca.gov/FactsStats/docs/QR/March2014_Quarterly.pdf AB 2299 Page H to access the amount of behavioral services approved in the consumer's IPP or IFSP due to the out-of-pocket expenses related to the insurance coverage. The copayments paid by the insured directly to the health care provider for each service or visit, the coinsurance paid by the insured for services in excess of what the policy covers, and deductibles associated with the treatments covered in their policies, became too costly for some families. In response to this emerging issue, most regional centers paid copayments and deductibles on a discretionary basis when a regional center determined that payment was critical for a consumer to receive the necessary and approved treatment and services. However, due to the varied practices around copayments and deductibles between regional centers, DDS argued that statutory clarification was necessary to establish a clear statewide policy. As a result, the developmental services trailer bill included in the 2013-14 state Budget Act (AB 89, Chapter 25, Statutes of 2013) provided increased funding to regional centers for the payment of copayments and coinsurance tied to services in a consumer's IPP or IFSP covered by health plans and insurance policies for cases in which the adult consumer, or the family of a consumer, has income at or below 400% of the federal poverty level and there is no third party responsible for payment. Trailer bill language also provided some flexibility for the payment of copayments and coinsurance for adult consumers or child consumers in families with income above 400% of FPL under extraordinary circumstances and when needed to successfully maintain the child at home or adult consumer in the least restrictive setting. The trailer bill prohibited regional center payment of health care service plan and health insurance policy deductibles. Regional center payment of deductibles : While this bill seeks to eliminate the means-test for regional center payments for what would otherwise be out-of-pocket expenses for consumers receiving IPP- and IFSP-approved services paid for by health plans and health insurers, the most controversial issue in recent years has been the requirement for regional centers to also pay consumers' deductibles for such services. During budget conversations leading to passage of the 2013-14 developmental services trailer bill, DDS indicated that administering deductible coverage could be more complex than copayments and coinsurance because deductibles are not as directly linked to utilization of a specific service that is AB 2299 Page I included in an IPP or IFSP and may apply to an entire family, not just the developmental services consumer. Some stakeholders have disagreed with this characterization, indicating that billings for deductibles can, and sometimes already do, specify both the service and the recipient of that service. Need for this bill : Prior to the insurance and health plan coverage mandate for certain behavioral health treatment, regional centers were obligated to pay the full cost of those services if they were included in consumers' IPPs and IFSPs. The author notes that since the passage of the developmental services trailer bill in 2013, families have been required to pay for services that used to be free to them. The author states: "There have been several challenges to AB 89 at the Office of Administrative Hearings (OAH) by families who cannot afford the co-pay or deductible. In those cases, judges have consistently sided with families and have required the regional center to either pay the cost of the co-payment or the full cost of treatment, if the family cannot afford the deductible? [This bill] reverses the AB 89 policy and reinstates the entitlement of the Lanterman Act by expressly requiring regional centers to pay for co-payments, coinsurance and deductibles for individuals with developmental disabilities. This bill ensures that regional center families will no longer be discouraged from obtaining insurance or incentivized to drop their existing health plan. [This bill] will allow regional centers to continue to access private insurance dollars, minimizing their fiscal obligation, while ensuring access for families." PROPOSED AMENDMENTS Current law prohibits regional centers from providing direct treatments or therapeutic services to consumers (WIC 4648 (f)). However, the provisions in this bill allow a regional center to directly provide a service or support if the cost of providing the service or support is less than paying for the copayment, coinsurance, or deductible payment for that service or support. To clarify this provision in the bill while maintaining the requirement that a regional center only provide direct treatment in emergency situations, committee staff recommends the following amendments: Page 4 AB 2299 Page J 22 (b)Notwithstanding subdivision (a), if the cost of a copayment, 23 coinsurance, or deductible payment associated with a service or 24 support is more than the cost of directlyprovidingpurchasing the service or 25 support, a regional center may directlyprovidepurchase the service or 26 support in lieu of paying the copayment, coinsurance, or deductible 27 payment. PRIOR LEGISLATION SB 163 (Hueso) 2013 would have required regional centers to pay any copayment, coinsurance, or deductible required under a health plan or health insurance policy that provides coverage for services included in a regional center consumer's Individual Program Plan or Individualized Family Service Plan. The bill was held on suspense in the Senate Appropriations Committee. SB 946 (Steinberg) Chapter 650, Statutes of 2011, required health care service plans and health insurance policies to provide coverage for behavioral health treatment for autism and related disorders, as specified. SB 166 (Steinberg) 2011, would have required health care service plans licensed by the Department of Managed Health Care (DMHC) and health insurers licensed by the Department of Insurance (DOI) to provide coverage for behavioral intervention therapy for autism. It was held in the Senate Health Committee. SB 770 (Steinberg and Evans) 2011, required health plans and insurers, except plans that contracted with Medi-Cal, to provide coverage for behavioral health treatment and to permit licensed or unlicensed providers to provide services. Held in the Assembly Appropriations Committee. REGISTERED SUPPORT / OPPOSITION : Support AB 2299 Page K Autism Speaks Center for Autism and Related Disorders (CARD) California State Council on Developmental Disabilities Steering Committee of the Alliance of California Autism Organizations (ACAO) co-sponsor Opposition None on file. Analysis Prepared by : Myesha Jackson / HUM. S. / (916) 319-2089