BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 22
AUTHOR: Beall
AMENDED: April 2, 2013
HEARING DATE: April 10, 2013
CONSULTANT: Robinson-Taylor
SUBJECT : Health care coverage: mental health parity.
SUMMARY : Requires health plans and health insurers
(collectively referred to as carriers) to submit annual reports
to the California Department of Managed Health Care (DMHC) and
the California Department of Insurance (CDI) certifying their
compliance with state and federal mental health parity laws.
Existing law:
1.Requires carriers that provide hospital, medical, or surgical
coverage to provide coverage for the diagnosis and medically
necessary treatment of severe mental illnesses of a person of
any age, and of serious emotional disturbances of a child
under the same terms and conditions applied to other medical
conditions. Requires these benefits to include outpatient
services, inpatient hospital services, partial hospital
services, prescription drugs, if the carrier contract includes
coverage for prescription drugs.
2.Lists the following conditions as "severe mental illnesses":
a. Schizophrenia;
b. Schizoaffective disorder;
c. Bipolar disorder (manic-depressive illness);
d. Major depressive disorders;
e. Panic disorder;
f. Obsessive-compulsive disorder;
g. Pervasive developmental disorder or autism;
h. Anorexia nervosa; and
i. Bulimia nervosa.
3.Requires the terms and conditions applied to the benefits
required to be applied equally to all benefits under the
carrier contract, including, but not be limited to, maximum
lifetime benefits, copayments, individual and family
deductibles.
4.Requires, under the federal Patient Protection and Affordable
Continued---
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Care Act (ACA) (Public Law 111-148), as amended by the Health
Care Education and Reconciliation Act of 2010 (Public Law
111-152), the Secretary of the federal Department of Health
and Human Services (HHS) to define the essential health
benefits (EHBs). These benefits must include specified
general categories and the items and services covered within
specified categories, one of which is mental health and
substance use disorder services, including behavioral health
treatment.
5.Requires, under the federal Mental Health Parity and Addiction
Equity Act (MHPAEA), group carriers that cover mental health
or substance use disorders (MH/SUD) to ensure that financial
requirements (such as copays and deductibles) and treatment
limitations (such as visit limits) applicable to MH/SUD
benefits are no more restrictive than the predominant
requirements or limitations applied to substantially all
medical/surgical benefits. Exempts carrier policies sold to
employers with 50 or fewer employees and policies sold to
individuals.
6.Provides for the regulation of health insurers by the CDI
under the Insurance Code and provides for the regulation of
health plans by the DMHC pursuant to the Knox-Keene Health
Care Service Plan Act of 1975 (Knox-Keene Act).
This bill:
1.Requires on or after July 1, 2014, carriers to submit annual
reports to DMHC and CDI certifying compliance with MHPAEA, its
implementing regulations, and all federal guidance.
2.Requires the annual report to be a public record made
available upon request and to be published on DMHC's and CDI's
websites.
3.Permits DMHC and CDI to hold public hearings on the reports at
its own discretion or at the request of any person.
4.Requires the annual report to provide an analysis of the
plan's or contractor's compliance with MHPAEA using all of the
elements set forth in those provisions of law, as well as the
mental health parity standards (P-MHP 1, P-MHP 2, and P-MHP 3)
of the American Accreditation HealthCare Commission (now known
as URAC) Health Plan Accreditation Guide, Version 7, or any
subsequent versions.
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5.Requires, as a part of the annual report, carriers to conduct:
a. A survey of enrollees to collect responses pertaining to
enrollee experiences with mental health and substance use
care; and,
b. A survey of providers to collect responses pertaining to
provider experiences with providing mental health and
substance use care.
6.Requires carriers to use the compliance criteria set forth in
the URAC mental health parity standards to structure the
surveys.
7.Prohibits the annual reports from including any information
that may individually identify enrollees including, but not
limited to, medical record numbers, names, and addresses.
8.Exempts Medi-Cal contracts from the provisions of this bill.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee
COMMENTS :
1. Author's statement. While MH/SUD services are required
benefits, access to such essential benefits heavily depends on
plan compliance with MH/SUD parity and equity laws. According
to the author, psychiatrists and other psychotherapy
professional associations, hospital associations, and members
of the National Alliance on Mental Illness (NAMI), have noted
that too often consumers are denied access to, or are
misinformed about, their MH/SUD benefits, which can hinder them
from receiving necessary services in a timely manner. The
author argues that these are discriminatory acts, they prevent
patients with mental disorders from accessing and receiving
medically necessary care to which they are entitled, and they
violate both state and national parity laws. The author
maintains that lack of timely access to appropriate, medically
necessary MH/SUD services can cause conditions to worsen, and
lead to costly emergency and inpatient care.
The author argues without strong oversight, such compliance
limitations are often left unaddressed. Too often the burden
of ensuring parity compliance has been with the consumer (i.e.,
grievances, lawsuits, etc.), whereas it is clearly the
carrier's responsibility to comply with federal and state laws.
The author asserts that carriers are evading their obligations
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to provide statutorily adequate levels of care and DMHC and CDI
do not have MH/SUD population-specific tools that would enable
adequate enforcement of parity. The author further argues that
characteristics of persons living with mental illness or mental
health concerns make it significantly less likely that they
will file complaints through the formal channels, request an
appeal, ask for help or engender independent medical reviews.
This bill attempts to correct this problem by providing an
additional data source for regulators to use to ensure that
beneficiaries and patients are receiving MH/SUD services under
conditions that are at parity with services for other health
conditions.
2. State and federal mental health parity law. There are three
separate provisions of law on carrier coverage of mental
health. Under current state law, as enacted by AB 88
(Thomson), Chapter 534, Statutes of 1999, carriers are required
to cover the diagnosis and medically necessary treatment of
"severe mental illness" (SMI) of a person of any age, and of
"serious emotional disturbances" of a child. Coverage is
required to be at parity - under the same terms and conditions
applied to other medical conditions. Such terms and conditions
include, but are not limited to, maximum lifetime benefits,
copayments, and individual and family deductibles. The state
law requires parity with respect to enrollee cost-sharing for
covered benefits. California's current mental health parity law
applies to the large group, small group, and individual
(non-group) markets.
Under the federal MHPAEA of 2008, carriers providing group
coverage that cover MH/SUD must provide coverage that is no
more restrictive than coverage for other medical/surgical
benefits. MHPAEA does not require a carrier to provide MH/SUD
benefits. Rather, if a carrier provides medical/surgical and
MH/SUD benefits, it must comply with MHPAEA's parity
requirements. This parity provision applies to financial
requirements (for example, deductibles and copayments) and
treatment limitations. The federal law applies to all group
carriers, but small groups with 50 or fewer employees are
exempt. The federal Department of Labor (DOL), HHS, and the
U.S. Treasury collectively promulgated interim final
regulations on February 2, 2010 to implement the provisions of
MHPAEA. Final regulations are anticipated by the end of this
year to provide further guidance to clarify certain
requirements to assist the marketplace with the implementation
of and facilitate understanding of and compliance with MHPAEA.
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The ACA explicitly includes MH/SUD services, including behavioral
health treatment, as one of the ten categories of service that
must be covered as EHB's. The ACA further mandates that MH/SUD
benchmark coverage be provided at parity with other medical and
surgical benefits offered by carriers, pursuant to MHPAEA.
3. URAC. URAC is a nonprofit independent organization
promoting healthcare quality by accrediting healthcare
organizations. URAC recently released accreditation standards
that have incorporated MHAPEA and the interim federal
regulations that govern the statute. According to the author,
the inclusion of the federal parity law and its regulation in
these accreditation standards provides an additional level of
oversight on MHPAEA compliance for carriers. The accreditation
standards require a carrier to provide: a detailed analysis
documenting compliance with MHAPEA and/or state law or
regulation; an analysis demonstrating utilization management
protocols applied to MH/SUD benefits do not have more
restrictive non-quantitative treatment limitations;
documentation that MH/SUD parity is addressed in written
agreements with contractors providing MH/SUD health care
services.
4. State oversight of compliance. The two state agencies that
have primary oversight of carrier compliance with state and
federal mental health parity laws and their implementing
regulations are DMHC and CDI. At least once every three years,
DMHC conducts a Routine Medical Survey of a plan which includes
a review of the plans policies and procedures and the overall
performance of the plan in providing health care benefits and
meeting the health needs of its enrollees. Similarly, CDI
routinely conducts Market Conduct Examinations. Both market
conduct examinations and non-routine medical surveys are also
scheduled based on consumer complaint activity and by special
request.
Individuals covered by carriers in California are also entitled
to an Independent Medical Review (IMR) if a carrier denies
health care services or payment for health care services based
on medical necessity. An IMR is a process where expert
independent medical professionals are selected to review
specific medical decisions made by the plans or insurers. DMHC
and CDI administer the IMR program to enable consumers to
request an impartial appraisal of medical decisions within
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certain guidelines specified in law. An IMR can only be
requested if the carrier's decision involves the medical
necessity of a treatment, an experimental or investigational
therapy for certain medical conditions, or a claims denial for
emergency or urgent medical services.
5. Double referral. This bill is double referred. Should it
pass out of this committee, it will be referred to the Senate
Judiciary Committee.
6. Support. The sponsor of this legislation, the California
Psychiatric Association (CPA), psychiatrists and other
providers of mental health services know that simple mandates
of benefits such as the mental health coverage required in both
the California and federal parity laws is a necessary first
step to correct discrimination in insurance and health service
delivery. However, the sponsor argues, while benefits on paper
are necessary they are not sufficient in themselves to deliver
on the promise of equity in parity statutes. CPA maintains
that in California, enforcement is complaint driven and many
patients and their psychiatrists or other providers won't or
don't complain about their care or their lack of care for a
variety of reasons: stigma and discrimination; lack of time;
bureaucratically complex and demanding processes to complain or
appeal denials of care; the vicissitudes of mental illness
which may make a person with a mental illness unable to
persevere or persist in complaining if they even complain at
all. This, according to the sponsor, is a weakness in the
current regulatory scheme which relies heavily on complaints to
enable enforcement. CPA maintains that this bill adds a new
source of data for enforcement, and places the onus on plans
and insurers for compliance.
The National Alliance on Mental Illness (NAMI) and the California
Alliance (CA) both state in support of this bill that complaint
numbers are skewed because the current process requires a
person who is likely grappling with a mental disorder to
voluntarily file a complaint and cope with a morass of red tape
once the complaint is filed. NAMI and CA assert that an
enforcement system largely based on consumer complaints is
neither appropriate nor does it accurately reflect an insurer's
compliance with the law.
7. Opposition. The California Association of Health Plans
(CAHP) and the Association of California Life and Health
Insurance Companies (ACLHIC) both write in opposition to this
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bill that while they appreciate the intent of this bill, they
do not believe that legislation is necessary. CAHP and ACLHIC
maintain that DMHC and CDI already have the authority to
evaluate their policies to ensure compliance with all mandated
coverage including services that fall under the state and
federal mental health parity laws. Both argue that in this era
of escalating costs and significant premium increases,
mandating redundant reporting requirements, is
counterproductive to their efforts to reduce administrative
costs and make health insurance more affordable and available
to Californians. CAHP and ACLHIC sustain that it is critical at
this juncture to put all of their resources toward implementing
the ACA in a meaningful way and oppose any bills that disrupt
that work or place new regulatory or administrative costs on
their members.
SUPPORT AND OPPOSITION :
Support: California Psychiatric Association (sponsor)
California Alliance
California Black Health Network
California Council of Community Mental Health Agencies
California Division of American Association for
Marriage and Family Therapy
California Mental Health Directors Association
California Narcotics Officers' Association
County Alcohol and Drug Program Administrators
Association of California
Drug Policy Alliance
EMQ FamiliesFirst
Health Access California
Henrietta Weill Memorial Child Guidance Clinic
Latino Coalition for a Health California
Mental Health America of California
National Alliance on Mental Illness
Pacific Clinics
Phoenix House
Santa Clara County Board of Supervisors
Oppose: Association of California Life and Health Insurance
Companies
California Association of Health Plans
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