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  








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            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  








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            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