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 statebegin delete 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 andend delete
to provide claims or other data to large group purchasers that request the data and demonstrate the ability to comply with privacy laws, asbegin delete specified. The billend deletebegin insert specified, andend insert would requirebegin delete aend deletebegin insert theend insert health care service plan to use only deidentified data inbegin delete itsend deletebegin insert thoseend insert 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 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 plan subject to subdivision (a) shall
13also
disclose annually the following aggregate data for all rate
14filings submitted under this section:
15(1) Number and percentage of rate filings reviewed by the
16following:
17(A) Plan year.
18(B) Segment type.
19(C) Product type.
20(D) Number of subscribers.
P3 1(E) Number of covered lives affected.
2(2) The plan’s average rate increase by the following categories:
3(A) Plan year.
4(B) Segment type.
5(C) Product type.
6(D) Benefit category.
7(E) Number of covered lives affected.
8(3) Any cost containment and quality improvement efforts since
9the plan’s last rate filing for the same category of health benefit
10plan. To the extent possible, the plan shall describe any significant
11new health care cost containment and quality improvement efforts
12and provide an estimate of potential savings together with an
13estimated cost or savings for the projection period.
14(d) begin deleteA end deletebegin insertExcept
as provided in subdivision (e), a end inserthealth care service
15plan shall disclose annually the following aggregate data for all
16products sold in the large group market:
17(1) Plan year.
18(2) Segment type.
19(3) Product type.
20(4) Number of subscribers.
21(5) Number of covered lives affected.
22(6) The plan’s average rate increase by the following:
23(A) Plan year.
24(B) Segment type.
25(C) Product type.
26(D) Benefit category, including, but not limited to, hospital,
27medical, ancillary, and other benefit categories reported publicly
28for individual and small employer rate filings.
29(E) Trend attributable to cost and trend attributable to utilization
30by benefit category.
31(e) A health care service plan thatbegin delete exclusively contracts with
32no more than two medical groups in the state to provide or
arrange
33for professional medical services for the enrollees of the planend delete
34unable to provide information on rate increases by benefit
35categories, including, but not limited to, hospital, outpatient
36medical, and mental health, or information on trend attributable
37to cost and trend attributable to utilization by benefit category
38pursuant to subdivision (d)end insert shall disclose annually all of the
39following aggregate data for its large group health care service
40plan contracts:
P4 1(1) The plan’s overallbegin delete annual medical trend factor assumptionsend delete
2begin insert aggregate data demonstrating or reasonably estimating
3year-to-year cost increases end insertin
the aggregate for large group rates
4by major service category. The plan shall distinguish between the
5begin delete trendend deletebegin insert increaseend insert ascribed to the volume of services provided and the
6begin delete trendend deletebegin insert increaseend insert ascribed to the cost of services provided, for those
7assumptions that shall include the following categories:
8(A) Hospital inpatient.
9(B) Outpatient visits.
10(C) Outpatient surgical or other procedures.
11(D) Professional medical.
12(E) Mental health.
13(F) Substance abuse.
14(G) Skilled nursing facility, if covered.
15(H) Prescription drugs.
16(I) Other ancillary services.
17(J) Laboratory.
18(K) Radiology or imaging.
19(2) A plan may provide aggregated additional data that
20demonstrate or reasonably estimate year-to-year cost increases in
21each of the
specific service categories specified in paragraph (1)
22for each of the major geographic regions of the state.
23(3) The amount of projected trend attributable to the following
24categories:
25(A) Use of services by service and disease category.
26(B) Capital investment.
27(C) Community benefit expenditures, excluding bad debt and
28valued at cost.
29(4) The amount and proportion of costs attributed tobegin delete theend delete
30begin insert contractingend insert medical groups that
would not have been attributable
31as medical losses if incurred by the health plan rather than the
32medical group.
33(f) (1) A health care service plan that exclusively contracts with
34no more than two medical groups in the state to provide or arrange
35for professional medical services for the enrollees of the plan shall
36provide claims data at no charge to a large group purchaser
37annually if the large group purchaser requests the information. The
38health care service plan shall provide claims data that a qualified
39statistician has determined are deidentified so that the claims data
P5 1do not identify or do not provide a reasonable basis from which
2to identify an individual.
3(2) Information provided to a large group purchaser under this
4subdivision shall not be subject to the
public disclosure
5requirements in subdivision (a) of Section 1385.07.
6(3) If claims data are not available, the plan shall provide, at no
7charge, all of the following:
8(A) Deidentified data sufficient for the large group purchaser
9to calculate the cost of obtaining similar services from other health
10plans and evaluate cost-effectiveness by service and disease
11
category.
12(B) Deidentified patient-level data on demographics, prescribing,
13encounters, inpatient services, outpatient services, and any other
14data as may be required of the health plan to comply with risk
15adjustment, reinsurance, or risk corridors as required by the
16PPACA.
17(C) Deidentified patient-level data used to experience rate the
18large group, including diagnostic and procedure coding and costs
19assigned to each service.
20(D) The health care service plan shall obtain a formal
21determination from a qualified statistician that the data have been
22deidentified so that the data do not identify or do not provide a
23reasonable basis from which to identify an individual. The
24statistician shall certify
the formal determination in writing and
25shall, upon request, provide the protocol used for deidentification
26to the department.
27(4) Data provided pursuant to subdivision (e) shall only be
28provided to a large group purchaser that meets both of the
29following conditions:
30(A) Is able to demonstrate its ability to comply with state and
31federal privacy laws.
32(B) Is a large group purchaser that is either an
33employer-sponsored plan with an enrollment of greater than 1,000
34covered lives or a multiemployer trust.
35(g) The department may require all health care service plans to
36submit all rate filings to the National Association of Insurance
37Commissioners’ System
for Electronic Rate and Form Filing
38(SERFF). Submission of the required rate filings to SERFF shall
39be deemed to be filing with the department for purposes of
40compliance with this section.
No reimbursement is required by this act pursuant to
2Section 6 of Article XIII B of the California Constitution because
3the only costs that may be incurred by a local agency or school
4district will be incurred because this act creates a new crime or
5infraction, eliminates a crime or infraction, or changes the penalty
6for a crime or infraction, within the meaning of Section 17556 of
7the Government Code, or changes the definition of a crime within
8the meaning of Section 6 of Article XIII B of the California
9Constitution.
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