BILL ANALYSIS Ó
SENATE HUMAN
SERVICES COMMITTEE
Senator Jim Beall, Chair
BILL NO: AB 2299
A
AUTHOR: Nazarian
B
VERSION: May 23, 2014
HEARING DATE: June 24, 2014
2
FISCAL: Yes
2
9
CONSULTANT: Mareva Brown
9
SUBJECT
Developmental services: health insurance copayments
SUMMARY
This bill would eliminate the gross income test for
privately insured families or consumers who are required to
pay copayments or coinsurance for authorized autism
therapies. This bill also authorizes a regional center to
pay deductibles if the service or support is necessary to
successfully maintain the child at home or the adult
consumer in the least-restrictive setting, as specified.
ABSTRACT
Existing law:
1)Establishes the California Department of Developmental
Services (DDS) to administer the Lanterman Developmental
Disabilities Act, which entitles individuals with
developmental disabilities to community services and
supports. (WIC 4500)
2)Defines, in California law, "developmental disability" as
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a disability that originates before the age of 18,
continues, or can be expected to continue, indefinitely,
and constitutes a substantial disability. This term also
includes autism. (WIC 4512)
3)Establishes in California law that DDS contracts with
private non-profit regional centers to provide fixed
points of contact in the community for persons with
developmental disabilities and their families, so that
these persons may have access to the services and
supports best suited to them throughout their lifetime.
(WIC 4620)
4)Establishes Legislative intent to provide an array of
services and supports sufficient to meet the needs and
choices of each person with developmental disabilities,
regardless of age or degree of disability, and at each
stage of life and to support their integration into the
mainstream life of the community. To the maximum extent
feasible, services and supports should be available
throughout the state to prevent the dislocation of
persons with developmental disabilities from their home
communities. (WIC 4501)
5)Establishes an Individual Program Plan (IPP) 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)
6)Requires regional centers to identify and pursue all
possible sources of funding for consumers receiving
regional center services, including private insurance, as
specified and 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
participate in the plan. (WIC 4659)
7)Requires every health care service plan and health
insurance policy that provides hospital, medical or
surgical coverage to provide coverage for behavioral
health treatment for autism and related disorders under
the same guidelines that it provides other coverage. (HSC
1374.73 and INS 10144.51)
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8)Authorizes a regional center, when necessary to ensure a
consumer receives services, to pay an applicable
coinsurance or copayment for services in the consumer's
IPP or IFSP that are being paid for by the health care
service plan or health insurance policy of the consumer's
parent, guardian, or caregiver or the adult consumer,
providing there is no third-party liability for payment.
(WIC 4659.1)
9) Limits the authorization to pay copayments and
coinsurance to adult consumers or families whose gross
income does not exceed 400 percent of the federal poverty
level (FPL). (WIC 4659.1 (a) and (b))
10)In special circumstances, authorizes a regional center
to pay the coinsurance or copayment for a family or adult
consumer whose gross income exceeds 400 percent of FPL if
the service or support is necessary to successfully
maintain the child at home or the adult consumer in the
least-restrictive setting. Identifies those special
circumstances to include:
a) An extraordinary event that impacts the ability of
parent, guardian, or caregiver to meet the care and
supervision needs of the child or impacts the ability
to pay the coinsurance or copayment.
b) The existence of catastrophic loss, as defined,
that temporarily limits the ability to pay of the
parent, guardian, or caregiver, or adult consumer with
a health care service plan or health insurance policy
and creates a direct economic impact on the family or
adult consumer.
c) (3) Significant unreimbursed medical costs
associated with the care of the consumer or another
child who is also a regional center consumer.
(WIC 4659.1 (c))
11)Requires the parent, guardian, or caregiver of a
privately insured consumer, or a privately insured adult
consumer to provide the regional center with annual tax
documents, as specified, or to otherwise self-certify
annual income 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), WIC 4659.1
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(e))
12)Prohibits regional centers from paying health care
service plan or health insurance policy deductibles.
(WIC 4659.1 (g))
This bill:
1)Deletes all language that restricts the regional center
from paying coinsurance or copayments if the family's
gross income is above 400 percent of FPL.
2)Authorizes the regional center to pay deductibles for
health insurance policies or health care service plans in
order to maintain a consumer in the least restrictive
setting under the special circumstances that currently
apply to copayments and coinsurance for families with
incomes in excess of 400 percent of FPL. (See #10, above)
3)Maintains the prohibition against deductible payments
except in those circumstances.
4) Deletes the requirements that adult consumers or parents
who are privately insured provide proof of income to the
regional centers and notify the regional centers of a
change of income that would affect their eligibility to
pay copayments or coinsurance.
FISCAL IMPACT
According to an analysis by the Assembly Committee on
Appropriations, this bill will have potential ongoing costs
in the range of $10 million (GF) to pay for additional
regional center consumers' health insurance
copayments/coinsurance and potential ongoing costs in the
tens of millions (GF) to pay for regional center consumers'
health insurance deductibles. Additionally, the Committee
projected ongoing administrative costs in the low millions
to manage payments to families or insurance companies and
health plans by the regional centers.
BACKGROUND AND DISCUSSION
Purpose of the bill:
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The author states that the Lanterman Act's entitlement to
services was removed for some consumers with enactment of
last year's trailer bill, which requires families to pay
coinsurance and copayments if their income is above 400
percent FPL, and to provide regional centers with proof of
income if they are privately insured. According to the
author "this has created an arbitrary and unpredictable
division among those served by the regional center regional
and has forced some families to discontinue care for
financial reasons."
The author states that a survey by the Autism Society of
California found that almost 20 percent of insured families
receiving autism therapy at regional centers have cancelled
their health insurance policies of their children in large
part because they cannot afford the copays and deductibles.
The author argues that because regional centers are still
required to provide services for those uninsured consumers,
the entire cost of treatment, including medical coverage,
is shifted to the state. Requiring copayments and
prohibiting payments toward deductibles is hurting families
and potentially will cost the state more money if families
continue to (challenge the policy legally) or drop private
health insurance coverage, the author states.
Regional Centers
California's 21 regional centers are non-profit
organizations that provide local services and supports to
individuals through contracts with DDS. Regional centers
provide diagnosis and assessment of eligibility and help
plan, access, coordinate and monitor the services and
supports that are needed because of an individual's
developmental disability. Services for consumers are
determined through an individual program plan (IPP).
Additionally, regional centers share primary responsibility
with local education agencies for provision of early
intervention services under the California Early
Intervention Services Act.
A developmental disability is defined as 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
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autism spectrum disorders (ASD).
Autism
Autism is a neurodevelopmental disorder characterized by
impairments in social relating, language, and by the
presence of repetitive and stereotyped behaviors. The
National Institutes of Health describes autism as the most
severe form of a range of conditions that together make up
Autism Spectrum Disorder. Other conditions along the
spectrum include a milder form known as Asperger syndrome,
and childhood disintegrative disorder and pervasive
developmental disorder not otherwise specified (usually
referred to as PDD-NOS). Although ASD varies significantly
in character and severity, it occurs in all ethnic and
socioeconomic groups and affects every age group. Experts
estimate that 1 out of 88 children age 8 will have an
ASD.<1> Males are four times more likely to have an ASD
than females.
According to data from DDS, in March 2014 approximately
70,000 regional center consumers had a diagnosis of autism
or PDD-NOS, more than twice as many regional center
consumers as had the same diagnosis in 2006. Three in 10
regional center consumers have a diagnosis of autism or
PDD, although many consumers have multiple conditions.
Insurance coverage of behavioral treatment for autism
In 2011, SB 946 (Steinberg, Chapter 650, Statutes of 2011)
required health care service plans and health insurance
companies in California to begin covering behavioral health
treatment for pervasive developmental disorders or autism.
State law defines intensive behavioral intervention therapy
as any form of Applied Behavioral Analysis (ABA) that is
comprehensive, designed to address all domains of
functioning, and provided in multiple settings for no more
than 40 hours per week, across all settings, depending on
the individual's needs and progress. Interventions can be
delivered in a 1:1 ratio or small group format, as
appropriate.
An analysis by the California Health Benefits Review
-------------------------
<1> Centers for Disease Control and Prevention: Morbidity
and Mortality Weekly Report, March 30, 2012
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Program (CHBRP) estimated savings to the state from moving
ABA services from DDS to private insurance of about $146
million. CHBRP, created in 2002 within the University of
California system, responds to Legislative requests to
provide independent analysis of the medical, financial, and
public health impacts of proposed health insurance benefit
mandates and repeals. In a report on proposed requirements
for health insurers and plans to cover behavioral treatment
services, CHBRP analysts reported that it was unknown
whether the shift would result in a reduction in financial
burden for consumers and their families; however the
program estimated a $17.1 million increase in out-of-pocket
expenses for enrollees with newly covered benefits.
Prior to the 2013 budget trailer bill, both deductibles and
co-payments were reimbursed to the consumer or family upon
receipt of services and an invoice. Common practice was to
pay both co-pays and deductibles on a discretionary basis -
when a regional center determined that it was critical for
a consumer to receive care. One example was a regional
center that paid a $5,000 deductible for a family that then
was able to have insurance coverage for $28,000 in
behavioral services. However, there was substantial
inconsistency across the state, and advocates argued for
statute that would require copayments, coinsurance and
deductibles. The deductible issue proved to be
controversial. The 2013 DDS budget trailer bill, AB 89,
(Committee on Budget and Fiscal Review) Chapter 25,
Statutes of 2013, permitted regional centers to pay
coinsurance and copayments for families whose gross income
was below 400 percent of FPL, but prohibited the payment of
any deductibles.
Regional Center of the East Bay legal decision
The question of whether to include deductibles was given
more urgency by a Nov. 9, 2012, administrative law ruling
that the Regional Center of the East Bay (RCEB) must pay
the deductible for a 7-year-old child in its care. The case
focused on whether the regional center appropriately
discontinued ABA therapy because the boy was covered by his
family's private insurance.
The boy's individual deductible was $6,800 per year, and
the family's annual deductible is $13,600. The child's
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father had secured a policy to provide catastrophic health
coverage for his family, but neither the family nor the boy
individually had met the deductible. Yet the regional
center informed the family on Aug. 27, 2012 that it was
discontinuing ABA services at the end of the following
month. The family appealed, arguing that the regional
center should pay for ABA services until the deductible was
satisfied, just as the regional center would be obligated
to pay for services if the family had no insurance. The
family could not afford to pay the monthly cost of ABA
services.
The regional center argued that if it were to reimburse the
family for ABA services throughout the year, the family may
have medical expenses later in the year that would have
satisfied the family deductible; making payment of the ABA
services an unnecessary public expenditure.
The judge ruled that the regional center could not
discontinue funding of ABA services based on the family's
insurance coverage. The family's failure to meet its
deductible independent of ABA services renders the
insurance policy unavailable, according to the legal
opinion, which also noted that this imposes a liability to
the family that is not imposed on other parents of autistic
consumers who are provided ABA services.
2014-15 Budget actions
The 2014 DDS budget trailer bill, (AB 1461), deletes the
prohibition on deductibles and instead adds deductibles to
the existing authorization of payments for coinsurance and
copayments. It maintains the existing limit for all
payments to families earning below 400 percent of FPL, or
above that level under the specified circumstances.
Related legislation:
AB 89, (Committee on Budget and Fiscal Review) Chapter 25,
Statutes of 2013, the DDS budget trailer bill, permitted
regional centers to pay coinsurance and copayments for
families whose gross income was below 400 percent of FPL.
It prohibited the payment of any deductibles.
SB 163 (Hueso) 2013 would have required regional centers to
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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.
COMMENTS
Should AB 2299 be passed from this committee, staff
suggests the author revise the language in the next
committee to reflect the new statutory language, as enacted
by the budget trailer bill. Additionally, the author may
want to consider the impact of trailer bill language on
this bill and modify the language accordingly.
Specifically, this bill is narrower than trailer bill in
that it permits deductibles only in some cases, whereas
trailer bill permits deductibles in all cases up to 400
percent of FPL. This bill is broader in other areas,
specifically in that it eliminates all asset tests, while
trailer bill maintains the 400 percent of FPL threshold and
the requirement for families to submit their tax or other
income verification information to regional centers.
PRIOR VOTES
Assembly Floor 74 - 0
Assembly Appropriations 13 - 0
Assembly Human Services 6 - 0
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POSITIONS
Support: Autism Speaks (Sponsor)
California State Council on Developmental
Disabilities (co-sponsor)
Alliance of California Autism Organizations
Association of Regional Centers and Agencies
California Association for Behavior Analysis
Center for Autism and Related Disorders
Developmental Disabilities Area Board 10
Small School Districts' Association
Oppose: None received.
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