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.begin insert Existing law provides for the regulation of health insurers by the Department of Insurance.end insert Existing law requires health care service plans, for large group plan contracts,begin insert and health insurers, for large group health insurance policies,end insert at least 60 days in advance of a rate change, to file with thebegin delete departmentend deletebegin insert
respective departmentsend insert all specified rate information for unreasonable rate increases and, with that filing, to disclose specified aggregate data.
This bill would instead require the plansbegin insert and insurersend insert 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 planbegin insert or health insurerend insert that exclusively contracts with no more than 2 medical groups in the state 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, and would require the health care service planbegin insert or health insurerend insert to use only deidentified data in those 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.
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) Except as provided in subdivision (e), a health care service
16plan shall disclose annually the following aggregate data
for all
17products sold in the large group market:
18(1) Plan year.
19(2) Segment type.
20(3) Product type.
21(4) Number of subscribers.
22(5) Number of covered lives affected.
23(6) The plan’s average rate increase by the following:
24(A) Plan year.
25(B) Segment type.
26(C) Product type.
27(D) Benefit
category, including, but not limited to, hospital,
28medical, ancillary, and other benefit categories reported publicly
29for individual and small employer rate filings.
30(E) Trend attributable to cost and trend attributable to utilization
31by benefit category.
32(e) A health care service plan that is unable to provide
33information on rate increases by benefit categories, including, but
34not limited to, hospital, outpatient medical, and mental health, or
35information on trend attributable to cost and trend attributable to
36utilization by benefit category pursuant to subdivision (d) shall
37disclose annually all of the following aggregate data for its large
38group health care service plan contracts:
39(1) The plan’s
overall aggregate data demonstrating or
40reasonably estimating year-to-year cost increases in the aggregate
P4 1for large group rates by major service category. The plan shall
2distinguish between the increase ascribed to the volume of services
3provided and the increase ascribed to the cost of services provided,
4for those assumptions that shall include the following categories:
5(A) Hospital inpatient.
6(B) Outpatient visits.
7(C) Outpatient surgical or other procedures.
8(D) Professional medical.
9(E) Mental health.
10(F) Substance abuse.
11(G) Skilled nursing facility, if covered.
12(H) Prescription drugs.
13(I) Other ancillary services.
14(J) Laboratory.
15(K) Radiology or imaging.
16(2) A plan may provide aggregated additional data that
17demonstrate or reasonably estimate year-to-year cost increases in
18each of the specific service categories specified in paragraph (1)
19for each of the major geographic regions of the state.
20(3) The amount of projected trend attributable to the following
21categories:
22(A) Use of services by service and disease category.
23(B) Capital investment.
24(C) Community benefit expenditures, excluding bad debt and
25valued at cost.
26(4) The amount and proportion of costs attributed to contracting
27medical groups that would not have been attributable as medical
28losses if incurred by the health plan rather than the medical group.
29(f) (1) 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
32provide claims data at no
charge to a large group purchaser
33annually if the large group purchaser requests the information. The
34health care service plan shall provide claims data that a qualified
35statistician has determined are deidentified so that the claims data
36do not identify or do not provide a reasonable basis from which
37to identify an individual.
38(2) Information provided to a large group purchaser under this
39subdivision shall not be subject to the public disclosure
40requirements in subdivision (a) of Section 1385.07.
P5 1(3) If claims data are not available, the plan shall provide, at no
2charge, all of the following:
3(A) Deidentified data sufficient for the large group purchaser
4to calculate the cost of obtaining similar services from other health
5
plans and evaluate cost-effectiveness by service and disease
6
category.
7(B) Deidentified patient-level data on demographics, prescribing,
8encounters, inpatient services, outpatient services, and any other
9data as may be required of the health plan to comply with risk
10adjustment, reinsurance, or risk corridors as required by the
11PPACA.
12(C) Deidentified patient-level data used to experience rate the
13large group, including diagnostic and procedure coding and costs
14assigned to each service.
15(D) The health care service plan shall obtain a formal
16determination from a qualified statistician that the data have been
17deidentified so that the data do not identify or do not provide a
18reasonable basis from which to identify an individual. The
19statistician shall certify
the formal determination in writing and
20shall, upon request, provide the protocol used for deidentification
21to the department.
22(4) Data provided pursuant to subdivision (e) shall only be
23provided to a large group purchaser that meets both of the
24following conditions:
25(A) Is able to demonstrate its ability to comply with state and
26federal privacy laws.
27(B) Is a large group purchaser that is either an
28employer-sponsored plan with an enrollment of greater than 1,000
29covered lives or a multiemployer trust.
30(g) The department may require all health care service plans to
31submit all rate filings to the National Association of Insurance
32Commissioners’ System
for Electronic Rate and Form Filing
33(SERFF). Submission of the required rate filings to SERFF shall
34be deemed to be filing with the department for purposes of
35compliance with this section.
begin insertSection 10181.4 of the end insertbegin insertInsurance Codeend insertbegin insert is amended to
37read:end insert
(a) For large group health insurance policies, all
39health insurers shall file with the department at least 60 days prior
40to implementing any rate change all required rate information for
P6 1unreasonable rate increases. This filing shall be concurrent with
2the written notice described in Section 10199.1.
3(b) For large group rate filings, health insurers shall submit all
4information that is required by PPACA. A health insurer shall also
5submit any other information required pursuant to any regulation
6adopted by the department to comply with this article.
7(c) A health insurer subject to subdivision (a) shall also disclose
8begin insert
annuallyend insert the following aggregate data for all rate filings submitted
9under thisbegin delete section in the large group health insurance market:end delete
10begin insert
section:end insert
11(1) Number and percentage of rate filings reviewed by the
12following:
13(A) begin deletePlan end deletebegin insertPolicy end insertyear.
14(B) Segment type.
15(C) Product type.
16(D) Number of insureds.
17(E) Number of covered lives affected.
18(2) The insurer’s average rate increase by the following
19categories:
20(A) begin deletePlan end deletebegin insertPolicy end insertyear.
21(B) Segment type.
22(C) Product type.
begin insert23(D) Benefit category.
end insertbegin insert24(E) Number of covered lives affected.
end insert
25(3) Any cost containment and quality improvement efforts since
26the health insurer’s last rate filing for the same category of health
27insurance policy. To the
extent possible, the health insurer shall
28describe any significant new health care cost containment and
29quality improvement efforts and provide an estimate of potential
30savings together with an estimated cost or savings for the projection
31period.
32(d) Except as provided in subdivision (e), a health insurer shall
33disclose annually the following aggregate data for all products
34sold in the large group market:
35(1) Policy year.
end insertbegin insert36(2) Segment type.
end insertbegin insert37(3) Product type.
end insertbegin insert38(4) Number of policyholders.
end insertbegin insert39(5) Number of covered lives affected.
end insertbegin insert40(6) The insurer’s average rate increase by the following:
end insertbegin insertP7 1(A) Policy year.
end insertbegin insert2(B) Segment type.
end insertbegin insert3(C) Product type.
end insertbegin insert
4(D) Benefit category, including, but not limited to, hospital,
5medical, ancillary, and other benefit categories reported publicly
6for individual and small employer rate filings.
7(E) Trend attributable to cost and trend attributable to
8utilization by benefit category.
9(e) A health insurer that is unable to provide information on
10rate increases by
benefit categories, including, but not limited to,
11hospital, outpatient medical, and mental health, or information
12on trend attributable to cost and trend attributable to utilization
13by benefit category pursuant to subdivision (d), shall disclose
14annually all of the following aggregate data for its large group
15health insurance policies:
16(1) The insurer’s overall aggregate data demonstrating or
17reasonably estimating year-to-year cost increases in the aggregate
18for large group rates by major service category. The insurer shall
19distinguish between the increase ascribed to the volume of services
20provided and the increase ascribed to the cost of services provided,
21for those assumptions that shall include the following categories:
22(A) Hospital inpatient.
end insertbegin insert23(B) Outpatient visits.
end insertbegin insert24(C) Outpatient surgical or other procedures.
end insertbegin insert25(D) Professional medical.
end insertbegin insert26(E) Mental health.
end insertbegin insert27(F) Substance abuse.
end insertbegin insert28(G) Skilled nursing facility, if covered.
end insertbegin insert29(H) Prescription drugs.
end insertbegin insert30(I) Other ancillary services.
end insertbegin insert31(J) Laboratory.
end insertbegin insert32(K) Radiology or imaging.
end insertbegin insert
33(2) An insurer may provide aggregated additional data that
34demonstrate or reasonably estimate year-to-year cost increases
35in each
of the specific service categories specified in paragraph
36(1) for each of the major geographic regions of the state.
37(3) The amount of projected trend attributable to the following
38categories:
39(A) Use of services by service and disease category.
end insertbegin insert40(B) Capital investment.
end insertbegin insert
P8 1(C) Community benefit expenditures, excluding bad debt and
2valued at cost.
3(4) The amount and proportion of costs attributed to contracting
4medical groups that would not have been attributable as medical
5losses if incurred by the health insurer rather than the medical
6group.
7(f) (1) A health insurer that exclusively contracts with no more
8
than two medical groups in the state to provide or arrange for
9professional medical services for the insureds of the insurer shall
10provide claims data at no charge to a large group purchaser
11annually if the large group purchaser requests the information.
12The health insurer shall provide claims data that a qualified
13statistician has determined are deidentified so that the claims data
14do not identify or do not provide a reasonable basis from which
15to identify an individual.
16(2) Information provided to a large group purchaser under this
17subdivision shall not be subject to the public disclosure
18requirements in subdivision (a) of Section 10181.7.
19(3) If claims data are not available, the insurer shall provide,
20at no charge, all of the following:
21(A) Deidentified data sufficient for the large group purchaser
22to calculate
the cost of obtaining similar services from other health
23insurers and plans and evaluate cost-effectiveness by service and
24disease category.
25(B) Deidentified patient-level data on demographics,
26prescribing, encounters, inpatient services, outpatient services,
27and any other data as may be required of the health insurer to
28comply with risk adjustment, reinsurance, or risk corridors as
29required by PPACA.
30(C) Deidentified patient-level data used to experience rate the
31large group, including diagnostic and procedure coding and costs
32assigned to each service.
33(D) The health insurer shall obtain a formal determination from
34a qualified statistician that the data have been deidentified so that
35the data do not identify or do not provide a reasonable basis from
36which to identify an individual. The statistician shall certify the
37
formal determination in writing and shall, upon request, provide
38the protocol used for deidentification to the department.
P9 1(4) Data provided pursuant to subdivision (e) shall only be
2provided to a large group purchaser that meets both of the
3following conditions:
4(A) Is able to demonstrate its ability to comply with state and
5federal privacy laws.
6(B) Is a large group purchaser that is either an
7employer-sponsored plan with an enrollment of greater than 1,000
8covered lives or a multiemployer trust.
9(d)
end delete
10begin insert(end insertbegin insertg)end insert The department may require all health insurers to submit all
11rate filings to the National Association of Insurance
12Commissioners’ System for Electronic Rate and Form Filing
13(SERFF). Submission of the required rate filings to SERFF shall
14be deemed to be filing with the department for purposes of
15compliance with this section.
No reimbursement is required by this act pursuant to
18Section 6 of Article XIII B of the California Constitution because
19the only costs that may be incurred by a local agency or school
20district will be incurred because this act creates a new crime or
21infraction, eliminates a crime or infraction, or changes the penalty
22for a crime or infraction, within the meaning of Section 17556 of
23the Government Code, or changes the definition of a crime within
24the meaning of Section 6 of Article XIII B of the California
25Constitution.
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