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 specified aggregate data for productsbegin insert and for rate filings, as specified,end insert 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.begin insert The bill would require a health care service plan to use only deidentified data in its disclosures, as specified, to protect the privacy rights of individuals.end insert
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 1385.04 of the Health and Safety Code
2 is amended to read:
(a) For large group health care service plan contracts,
4all health plans shall file with the department at least 60 days prior
5to implementing any rate change all required rate information for
6unreasonable rate increases. This filing shall be concurrent with
7the written notice described in subdivision (a) of Section 1374.21.
8(b) For large group rate filings, health plans shall submit all
9information that is required by PPACA. A plan shall also submit
10any other information required pursuant to any regulation adopted
11by the department to comply with this article.
12(c) A health care service planbegin insert
subject to subdivision (a)end insert shall
13also disclose annually the
following aggregate data forbegin delete products begin insert all rate filings submitted
14in the large group health plan market:end delete
15under this sectionend insertbegin insert: end insert
16(1) begin deleteIf a health care service plan submits information pursuant begin insertNumberend insert and percentage of rate filings
17to subdivision (b), number end delete
18reviewed by the following:
19(A) Plan year.
20(B) Segment type.
21(C) Product type.
P3 1(D) Number of subscribers.
2(E) Number of covered lives affected.
3(2) The plan’s average rate increase by the following categories:
4(A) Plan year.
5(B) Segment type.
6(C) Product type.
7(D) Benefit category.
8(E) Number of covered lives affected.
9(3) Any cost containment and quality improvement efforts since
10the plan’s last rate filing for the same category of health benefit
11plan. To the extent possible, the plan shall describe any significant
12new health care cost containment and quality improvement efforts
13and provide an estimate of potential savings together with an
14estimated cost or savings for the projection period.
15(d) A health care service plan shall also disclose annually the
16following aggregate data for all products sold in the large group
17market:
18(1) Plan year.
end insertbegin insert19(2) Segment type.
end insertbegin insert20(3) Product type.
end insertbegin insert21(4) Number of subscribers.
end insertbegin insert22(5) Number of covered lives affected.
end insertbegin insert23(6) The plan’s average rate increase by the following:
end insertbegin insert24(A) Plan year.
end insertbegin insert25(B) Segment type.
end insertbegin insert26(C) Product type.
end insertbegin insert27(D) Benefit category.
end insert28(d)
end delete
29begin insert(e)end insert A health care service plan that exclusively contracts with
30no more than two medical groups in the state to provide or arrange
31for professional medical services for the enrollees of the plan shall
32also disclose annually all of the following for its large group health
33care service plan contracts:
34(1) The plan’s overall annual medical trend factor assumptions
35in the aggregate for large group rates by major servicebegin delete category, begin insert
category. The plan shall distinguish
36including all of the following:end delete
37between the trend ascribed to the volume of services provided and
38the trend ascribed to the cost of services provided, for those
39assumptions that shall include the following categories:end insert
40(A) Hospital inpatient.
P4 1(B) Outpatient visits.
2(C) Outpatient surgical or other procedures.
3(D) Professional medical.
4(E) Mental health.
5(F) Substance abuse.
6(G) Skilled nursing facility, if covered.
7(H) Prescription drugs.
8(I) Other ancillary services.
9(J) Laboratory.
10(K) Radiology or imaging.
11(2) A plan may provide aggregated additional data that
12begin deletedemonstrates end deletebegin insertdemonstrate end insertor reasonablybegin delete estimatesend deletebegin insert estimateend insert
13 year-to-year cost increases in each of the specific service categories
14specified in paragraph (1) for
each of the major geographic regions
15of the state.
16(3) The amount of the projected aggregate trend in the large
17group market attributable to the use of services, price inflation, or
18fees and risk for annual plan contract trends by each major service
19category specified in paragraph (1).
20(4) The amount of projected trend attributable to the following
21categories:
22(A) Use of services by service and disease category.
23(B) Price changes in physician costs, including compensation.
end delete24(C) Price changes in hospital contracts.
end delete25(D) Price changes in other provider contracts.
end delete26(E) Price changes in supplier contracts.
end delete27(F)
end delete28begin insert(B)end insert Cost changes in administrative costs for the health plan.
29(G)
end delete
30begin insert(C)end insert Cost changes in administrative costs for eachbegin delete contracting begin insert of the two contracting medical groups with an
31medical group.end delete
32exclusive contract with the plan.end insert
33(H)
end delete
34begin insert(D)end insert Capital investment for care locations, including, but not
35 limited to, hospitals and medical office buildings.
36(I)
end delete37begin insert(E)end insert Other capital investments.
38(J)
end delete
39begin insert(F)end insert Community benefit expenditures, excluding bad debt and
40valued at cost.
P5 1(K) All other budgetary expenditures, with additional detail as
2may be required by the department.
3(5) The amount and proportion of costs attributed to the medical
4groups that would not have been attributable as medical losses if
5incurred by the health plan rather than the medical group.
6(e)
end delete
7begin insert(f)end insert (1) A health care service plan that exclusively contracts with
8no more than two medical groups in the state to provide or arrange
9for professional medical services for the enrollees of the plan shall
10provide claims data at no charge to a large group purchaser if the
11large group purchaser requests thebegin delete information and demonstrates begin insert
information. The health care service plan shall provide
12that it is able to comply with relevant state and federal privacy
13laws.end delete
14claims data that a qualified statistician has determined are
15deidentified so that the claims data do not identify or do not provide
16a reasonable basis from which to identify an individual.end insert
17(2) Information provided to a large group purchaser under this
18subdivision shall not be subject to the public disclosure
19requirements in subdivision (a) of Section 1385.07.
20(3) If claims databegin delete isend deletebegin insert areend insert not available, the plan shall provide, at
21no charge, all of the following:
22(A) begin deleteData end deletebegin insertDeidentified
data end insertsufficient for the large group
23purchaser to calculate the cost of obtaining similar services from
24other health plans and evaluate cost-effectiveness by service and
25disease category.
26(B) Deidentified patient-level data on demographics, prescribing,
27encounters, inpatient services, outpatient services, and any other
28data as may be required of the health plan to comply with risk
29adjustment, reinsurance, or risk corridors as required by the
30PPACA.
31(C) Deidentified patient-level data used to experience rate the
32large group, including diagnostic and procedure coding and costs
33assigned to each service.
34(D) The health care
service plan shall obtain a formal
35determination from a qualified statistician that the data have been
36deidentified so that the data do not identify or do not provide a
37reasonable basis from which to identify an individual.
38(4) Data provided pursuant to subdivision (e) shall only be
39provided to a large group purchaser that meets both of the
40following conditions:
P6 1(A) Is able to demonstrate its ability to comply with state and
2federal privacy laws.
3(B) Is a large group purchaser that is either an
4employer-sponsered plan with an enrollment of greater than 1,000
5covered lives or a multiemployer trust.
6(f)
end delete
7begin insert(g)end insert The department may require all health care service plans to
8submit all rate filings to the National Association of Insurance
9Commissioners’ System for Electronic Rate and Form Filing
10(SERFF). Submission of the required rate filings to SERFF shall
11be deemed to be filing with the
department for purposes of
12compliance with this section.
No reimbursement is required by this act pursuant to
14Section 6 of Article XIII B of the California Constitution because
15the only costs that may be incurred by a local agency or school
16district will be incurred because this act creates a new crime or
17infraction, eliminates a crime or infraction, or changes the penalty
18for a crime or infraction, within the meaning of Section 17556 of
19the Government Code, or changes the definition of a crime within
20the meaning of Section 6 of Article XIII B of the California
21Constitution.
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