BILL ANALYSIS �
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THIRD READING
Bill No: SB 22
Author: Beall (D)
Amended: 5/28/13
Vote: 21
SENATE HEALTH COMMITTEE : 9-0, 4/10/13
AYES: Hernandez, Anderson, Beall, De Le�n, DeSaulnier, Monning,
Nielsen, Pavley, Wolk
SENATE APPROPRIATIONS COMMITTEE : 5-1, 5/23/13
AYES: De Le�n, Hill, Lara, Padilla, Steinberg
NOES: Walters
NO VOTE RECORDED: Gaines
SUBJECT : Health care coverage: mental health parity
SOURCE : California Psychiatric Association
DIGEST : This bill requires health plans and health insurers
(collectively referred to as carriers) to submit annual reports
to the Department of Managed Health Care (DMHC) and the
Department of Insurance (CDI) certifying their compliance with
state and federal mental health parity laws.
ANALYSIS :
Existing law:
1. Requires carriers that provide hospital, medical, or surgical
coverage to provide coverage for the diagnosis and medically
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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 conditions that are defined as having a "severe
mental illnesses."
3. Requires the terms and conditions applied to the benefits
required to be applied equally to all benefits under the
carrier contract.
4. Requires, under the federal Patient Protection and Affordable
Care Act (ACA), the Secretary of the federal Department of
Health and Human Services to define the essential health
benefits.
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.
6. Provides for the regulation of health insurers by CDI under
the Insurance Code and provides for the regulation of health
plans by 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
consolidated 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 Web sites.
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3. Permits DMHC and CDI to hold public hearings on the reports
at its discretion.
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.
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.
1. Requires carriers to use the compliance criteria set forth
in the URAC mental health parity standards to structure the
surveys.
2. Prohibits the annual reports from including any information
that may individually identify enrollees including, but not
limited to, medical record numbers, names, and addresses.
3. Exempts Medi-Cal contracts from the provisions of this bill.
Background
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" 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. California's current mental health parity law
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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. The
federal law applies to all group carriers, but small groups with
50 or fewer employees are exempt. The federal Department of
Labor, Department of Health and Human Services, and the United
States 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
compliance with MHPAEA.
The ACA explicitly includes MH/SUD services, including
behavioral health treatment, as one of the 10 categories of
service that must be covered as essential health benefits. 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.
URAC . URAC, a nonprofit independent health care accreditation
agency, recently released accreditation standards that have
incorporated MHAPEA and the interim federal regulations that
govern the statute. According to the author's office, the
inclusion of the federal parity law and its regulations in these
accreditation standards provides an additional level of
oversight on MHPAEA compliance for carriers.
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.
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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. DMHC and CDI administer the IMR program
to enable consumers to request an impartial appraisal of medical
decisions within 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
� One-time costs of about $190,000 for adoption of regulations
by the DMHC (Managed Care Fund).
� Potential ongoing costs of about $180,000 for follow-up
surveys and enforcement activities by the DMHC (Managed Care
Fund). To the extent that the required reports indicate that
health plans are not complying with state and federal
requirements, the DMHC would likely have to conduct follow-up
surveys of plan participants and potentially take enforcement
actions. The DMHC anticipates that, on average, it will need
to perform these actions for at least one health plan per
year.
� One-time costs of $160,000 for the adoption of regulations
by the CDI (Insurance Fund).
� Ongoing enforcement costs of $90,000 by the CDI (Insurance
Fund). The CDI indicates that it does not anticipate
significant enforcement costs. However, should the required
reports indicate that mental health parity requirements are
not being met, there may be costs to investigate those issues
and enforce current parity requirements.
SUPPORT : (Verified 5/23/13)
California Psychiatric Association (source)
AFSCME
Association of Regional Center Agencies
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California Academy of Physician Assistants
California Alliance
California Association of Alcohol and Drug Program Executives,
Inc
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
California Pan-Ethnic Health Network
Children Now
CLARE Foundation
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
Lincoln Child Center
Mental Health America of California
National Alliance on Mental Illness
Pacific Clinics
Phoenix House
Santa Clara County Board of Supervisors
The ARC and United Cerebral Palsy California Collaboration
OPPOSITION : (Verified 5/23/13)
Association of California Life and Health Insurance Companies
California Association of Health Plans
ARGUMENTS IN SUPPORT : According to the author's office, while
MH/SUD services are required benefits, access to such essential
benefits heavily depends on plan compliance with MH/SUD parity
and equity laws. The author's office states 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.
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The author's office 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's office 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.
According to the sponsor of this bill, 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.
CPA maintains that in California, enforcement is complaint
driven and many patients and their psychiatrists or other
providers will not or do not 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 CPA, 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.
NAMI and the California Alliance (CA) both state the 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.
ARGUMENTS IN OPPOSITION : The California Association of Health
Plans (CAHP) and the Association of California Life and Health
Insurance Companies (ACLHIC) state that while they appreciate
the intent of this bill, they do not believe this bill is
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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.
JL:k 5/28/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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