BILL ANALYSIS                                                                                                                                                                                                    Ó




                                                                  AB 2299
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          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  









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            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;










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             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  









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            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  









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          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,  









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          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  









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          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








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          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  









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          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









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          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 directly  providing   
          purchasing the service or 
          25   support, a regional center may directly  provide  purchase  
          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 









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          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