BILL ANALYSIS Ó SB 126 Page 1 Date of Hearing: August 14, 2013 ASSEMBLY COMMITTEE ON APPROPRIATIONS Mike Gatto, Chair SB 126 (Steinberg) - As Amended: August 8, 2013 Policy Committee: HealthVote:18-0 Urgency: No State Mandated Local Program: No Reimbursable: No SUMMARY This bill extends the sunset from July 1, 2014 to January 1, 2017, on statutes implementing requirements on health plans and insurers to provide coverage for behavioral health treatment (BHT) for pervasive developmental disorder or autism (PDD/A). FISCAL EFFECT The California Health Benefits Review Program (CHBRP) estimated no impact on cost or on public health from this bill, given that state mental health parity laws already require coverage for this treatment. However, in recent history there have been enforcement actions based upon consumer claims that they were not able to access BHT benefits for PDD/A despite existing law requirements. Thus, to the extent the clarity provided in this bill causes more BHT to be provided through health benefits, this bill may result in continued GF savings to school districts and the state Department of Developmental Services (DDS), to the extent BHT services provided as health benefits reduce the demand from these other primary payers. There is not likely to be an additional impact on private insurance costs, as the costs associated with ABA services are already built in to premiums. COMMENTS 1)Rationale . According to the author, SB 946 (Steinberg), Chapter 650, Statutes of 2011, which mandated coverage for BHT for PDD/A, has resulted in significant benefits that include SB 126 Page 2 expanded access to BHT services for PDD/A and lower cost-sharing for services. The author also indicates SB 946 has resulted in significant GF savings. The author believes extending the provisions of the current mandate will enable evaluation of recommendations that have been provided by a DMHC task force pursuant to SB 946, consideration of a "path to licensure" for BHT providers and paraprofessionals, coordination and synchronization with ACA, and assessment of future federal guidelines. 2)Behavioral Health Treatment for PDD/A . The most common BHT for PDD/A is Applied Behavioral Analysis (ABA). ABA is the process of systematically applying interventions based upon the principles of learning theory to improve socially significant behaviors to a meaningful degree. Socially significant behaviors include reading, academics, social skills, communication, and adaptive living skills like motor skills, eating and food preparation, personal self-care, domestic skills, home and community orientation, and work skills. ABA requires intensive treatments of more than 25 hours each week and costs about $50,000 each year. 3)Mandate Triggered Off if Found to Exceed EHBs. Under the federal Patient Protection and Affordable Care Act, health coverage provided in the small group or individual market (including through health exchanges) must provide essential health benefits (EHBs). Under federal law, individuals purchasing coverage through exchanges will be eligible for subsidies, based on income, paid by the federal government. However, pursuant to ACA, if a state imposes a benefit mandate that EHBs, the state is responsible for providing subsidies equal to the marginal costs for coverage of that mandated benefit. For 2014 and 2015, the federal Health and Human Services Agency has deferred to states to define and enforce an EHB standard using such a benchmark approach. Pursuant to state law, all plans and policies in the individual and small group markets will have to cover all benefits currently covered by a specific Kaiser Permanente small-group HMO plan, including BHT for PDD/A, in those years. The state could incur a cost associated with mandates that exceed EHBs beginning in 2016, pursuant to federal guidance that will be forthcoming in future years. A mandate may have SB 126 Page 3 unknown future state costs beginning in 2016 if the federal government defines EHBs in a new way (for example, using a nationwide standard) and finds that the mandate exceeds the to-be-defined EHB standards. However, to mitigate potential fiscal concerns, SB 946 states it does not mandate benefits beyond those defined as EHBs. Thus, it is unlikely that there would be an additional fiscal liability to the state as a result of this BHT mandate for health plans offered in the Exchange, because the mandate would be triggered off if EHBs do not require BHT to be covered. 4)Related Budget Action . The Senate Subcommittee No. 3 on Health and Human Services augmented the Medi-Cal budget by $100 million ($50 million GF) and adopted placeholder trailer bill language to add ABA services to Medi-Cal managed care for children ineligible for regional center services. This action was discussed in the Budget Conference Committee but not adopted in the final budget package. 5)Related Legislation . AB 1372 (Bonilla) is similar to this bill. It extends the operative dates of the BHT mandate from July 1, 2014 to July 1, 2017. AB 1372 is currently pending in Assembly Health Committee. Among numerous other provisions related to the expansion of Medi-Cal, SB 1 X1 (Hernandez and Steinberg), Chapter 4, Statutes of 2013 First Extraordinary Session adds mental health services in the EHB package, excluding BHT, as covered Medi-Cal benefits. 6)Previous Legislation . AB 1453 (Monning), Chapter 854, Statutes of 2012, and SB 951 (Ed Hernandez), Chapter 866, Statutes of 2012, establish California's EHBs. Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081