BILL NUMBER: SB 746 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 30, 2013
AMENDED IN SENATE APRIL 16, 2013
AMENDED IN SENATE APRIL 9, 2013
INTRODUCED BY Senator Leno
FEBRUARY 22, 2013
An act to amend Section 1385.04 of the Health and Safety Code,
relating to health care coverage.
LEGISLATIVE COUNSEL'S DIGEST
SB 746, as amended, Leno. Health care coverage: premium rates.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
provides for the licensure and regulation of health care service
plans by the Department of Managed Health Care and makes a willful
violation of the act a crime. Existing law requires health care
service plans, for large group plan contracts, at least 60 days in
advance of a rate change, to file with the department all specified
rate information for unreasonable rate increases and, with that
filing, to disclose specified aggregate data.
This bill would instead require the plans to disclose
that specified aggregate data for products
in the large group market on an annual basis. The bill would
also require a health plan that exclusively contracts with no more
than 2 medical groups in the state to annually disclose certain
information with respect to its large group plan contracts to the
department, including the plan's overall annual medical trend factor
assumptions by major service category and the amount of the projected
aggregate trend in the large group market attributable to the use of
services, price inflation, or fees and risk for annual plan contract
trends by each major service category, as specified, and to provide
claims or other data to large group purchasers that demonstrate the
ability to comply with privacy laws, as specified.
Because a willful violation of the bill's requirements would be a
crime, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1385.04 of the Health and Safety Code is
amended to read:
1385.04. (a) For large group health care service plan contracts,
all health plans shall file with the department at least 60 days
prior to implementing any rate change all required rate information
for unreasonable rate increases. This filing shall be concurrent with
the written notice described in subdivision (a) of Section 1374.21.
(b) For large group rate filings, health plans shall submit all
information that is required by PPACA. A plan shall also submit any
other information required pursuant to any regulation adopted by the
department to comply with this article.
(c) A health care service plan shall also disclose annually the
following aggregate data for all rate filings
products in the large group health plan market:
(1) Number If a health care service plan
submits information pursuant to subdivision (b), number
and percentage of rate filings reviewed by the following:
(A) Plan year.
(B) Segment type.
(C) Product type.
(D) Number of subscribers.
(E) Number of covered lives affected.
(2) The plan's average rate increase by the following categories:
(A) Plan year.
(B) Segment type.
(C) Product type.
(D) Benefit category.
(E) Number of covered lives affected.
(3) Any cost containment and quality improvement efforts since the
plan's last rate filing for the same category of health benefit
plan. To the extent possible, the plan shall describe any significant
new health care cost containment and quality improvement efforts and
provide an estimate of potential savings together with an estimated
cost or savings for the projection period.
(d) A health care service plan that exclusively contracts with no
more than two medical groups in the state to provide or arrange for
professional medical services for the enrollees of the plan shall
also disclose annually all of the following for its large group
health care service plan contracts:
(1) The plan's overall annual medical trend factor assumptions in
the aggregate for large group rates by major service category,
including all of the following:
(A) Hospital inpatient.
(B) Outpatient visits.
(C) Outpatient surgical or other procedures.
(D) Professional medical.
(E) Mental health.
(F) Substance abuse.
(G) Skilled nursing facility, if covered.
(H) Prescription drugs.
(I) Other ancillary services.
(J) Laboratory.
(K) Radiology or imaging.
(2) A plan may provide aggregated additional data that
demonstrates or reasonably estimates year-to-year cost increases in
each of the specific service categories specified in paragraph (1)
for each of the major geographic regions of the state.
(3) The amount of the projected aggregate trend in the large group
market attributable to the use of services, price inflation, or fees
and risk for annual plan contract trends by each major service
category specified in paragraph (1).
(4) The amount of projected trend attributable to the following
categories:
(A) Use of services by service and disease category.
(B) Price changes in physician costs, including compensation.
(C) Price changes in hospital contracts.
(D) Price changes in other provider contracts.
(E) Price changes in supplier contracts.
(F) Cost changes in administrative costs for the health plan.
(G) Cost changes in administrative costs for each contracting
medical group.
(H) Capital investment for care locations, including, but not
limited to, hospitals and medical office buildings.
(I) Other capital investments.
(J) Community benefit expenditures, excluding bad debt and valued
at cost.
(K) All other budgetary expenditures, with additional detail as
may be required by the department.
(5) The amount and proportion of costs attributed to the medical
groups that would not have been attributable as medical losses if
incurred by the health plan rather than the medical group.
(e) (1) A health care service plan that exclusively contracts with
no more than two medical groups in the state to provide or arrange
for professional medical services for the enrollees of the plan shall
provide claims data at no charge to a large group purchaser if the
large group purchaser requests the information and if the
large group demonstrates that it is able to comply with
relevant state and federal privacy laws.
(2) Information provided to a large group purchaser under this
subdivision shall not be subject to the public disclosure
requirements in subdivision (a) of Section 1385.07.
(2)
( 3) If claims data is not available, the
plan shall provide, at no charge, all of the following:
(A) Data sufficient for the large group purchaser to calculate the
cost of obtaining similar services from other health plans and
evaluate cost-effectiveness by service and disease category.
(B) Patient-level Deidentified
patient-level data on demographics, prescribing,
encounter encounters , inpatient services,
outpatient services, and any other data as may be required of the
health plan to comply with risk adjustment, reinsurance, or risk
corridors as required by the PPACA.
(C) Patient-level utilization Deidentified
patient-level data used to experience rate the large group,
including diagnostic and procedure coding and costs assigned to each
service.
(f) The department may require all health care service plans to
submit all rate filings to the National Association of Insurance
Commissioners' System for Electronic Rate and Form Filing (SERFF).
Submission of the required rate filings to SERFF shall be deemed to
be filing with the department for purposes of compliance with this
section.
SEC. 2. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.