BILL NUMBER: SB 746 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JUNE 25, 2013
AMENDED IN ASSEMBLY JUNE 17, 2013
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 specified
aggregate data for products and for rate filings, as specified, 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
request the data and demonstrate the ability to comply with
privacy laws, as specified. 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.
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 subject to subdivision (a) shall
also disclose annually the following aggregate data for all rate
filings submitted under this section:
(1) 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 shall also
disclose annually the following aggregate data for all products sold
in the large group market:
(1) Plan year.
(2) Segment type.
(3) Product type.
(4) Number of subscribers.
(5) Number of covered lives affected.
(6) The plan's average rate increase by the following:
(A) Plan year.
(B) Segment type.
(C) Product type.
(D) Benefit category. category, including,
but not limited to, hospital, medical, ancillary, and other benefit
categories reported publicly for individual and small employer rate
filing s.
(E) Trend attributable to cost and trend attributable to
utilization by benefit category.
(e) 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
aggregate data 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. The
plan shall distinguish between the trend ascribed to the volume of
services provided and the trend ascribed to the cost of services
provided, for those assumptions that shall include the following
categories:
(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 demonstrate
or reasonably estimate 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)
(3) The amount of projected trend attributable to the
following categories:
(A) Use of services by service and disease category.
(B) Cost changes in administrative costs for the health plan.
(C) Cost changes in administrative costs for each of the two
contracting medical groups with an exclusive contract with the plan.
(D)
(B) Capital investment for care locations,
including, but not limited to, hospitals and medical office
buildings. investment.
(E) Other capital investments.
(F)
(C) Community benefit expenditures, excluding bad debt
and valued at cost.
(5)
(4) 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.
(f) (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
annuall y if the large group purchaser requests the
information. The health care service plan shall provide claims data
that a qualified statistician has determined are deidentified so that
the claims data do not identify or do not provide a reasonable basis
from which to identify an individual.
(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.
(3) If claims data are not available, the plan shall provide, at
no charge, all of the following:
(A) Deidentified 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) Deidentified patient-level data on demographics, prescribing,
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) Deidentified patient-level data used to experience rate the
large group, including diagnostic and procedure coding and costs
assigned to each service.
(D) The health care service plan shall obtain a formal
determination from a qualified statistician that the data have been
deidentified so that the data do not identify or do not provide a
reasonable basis from which to identify an individual. The
statistician shall certify the formal determination in writing and
shall, upon request, provide the protocol used for deidentification
to the department.
(4) Data provided pursuant to subdivision (e) shall only be
provided to a large group purchaser that meets both of the following
conditions:
(A) Is able to demonstrate its ability to comply with state and
federal privacy laws.
(B) Is a large group purchaser that is either an
employer-sponsered employer-sponsored plan with
an enrollment of greater than 1,000 covered lives or a multiemployer
trust.
(g) 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.