BILL NUMBER: SB 746 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY SEPTEMBER 4, 2013
AMENDED IN ASSEMBLY AUGUST 6, 2013
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,
and to amend Section 10181.4 of the Insurance 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 provides for the
regulation of health insurers by the Department of Insurance.
Existing law requires health care service plans, for large group plan
contracts, and health insurers, for large group health
insurance policies, at least 60 days in advance of a rate
change, to file with the department respective
departments all specified rate information for unreasonable
rate increases and, with that filing, to disclose specified aggregate
data.
This bill would instead require the plans and insurers
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 or health insurer
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 plan or health insurer 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 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) Except as provided in subdivision (e), a health care service
plan shall 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, including, but not limited to, hospital,
medical, ancillary, and other benefit categories reported publicly
for individual and small employer rate filings.
(E) Trend attributable to cost and trend attributable to
utilization by benefit category.
(e) A health care service plan that is unable to provide
information on rate increases by benefit categories, including, but
not limited to, hospital, outpatient medical, and mental health, or
information on trend attributable to cost and trend attributable to
utilization by benefit category pursuant to subdivision (d) shall
disclose annually all of the following aggregate data for its large
group health care service plan contracts:
(1) The plan's overall aggregate data demonstrating or reasonably
estimating year-to-year cost increases in the aggregate for large
group rates by major service category. The plan shall distinguish
between the increase ascribed to the volume of services provided and
the increase 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 projected trend attributable to the following
categories:
(A) Use of services by service and disease category.
(B) Capital investment.
(C) Community benefit expenditures, excluding bad debt and valued
at cost.
(4) The amount and proportion of costs attributed to contracting
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 annually
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-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. Section 10181.4 of the Insurance
Code is amended to read:
10181.4. (a) For large group health insurance policies, all
health insurers 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 Section 10199.1.
(b) For large group rate filings, health insurers shall submit all
information that is required by PPACA. A health insurer shall also
submit any other information required pursuant to any regulation
adopted by the department to comply with this article.
(c) A health insurer subject to subdivision (a) shall also
disclose annually the following aggregate data for all
rate filings submitted under this section in the large group
health insurance market: section:
(1) Number and percentage of rate filings reviewed by the
following:
(A) Plan Policy year.
(B) Segment type.
(C) Product type.
(D) Number of insureds.
(E) Number of covered lives affected.
(2) The insurer's average rate increase by the following
categories:
(A) Plan Policy 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
health insurer's last rate filing for the same category of health
insurance policy. To the extent possible, the health insurer 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) Except as provided in subdivision (e), a health insurer shall
disclose annually the following aggregate data for all products sold
in the large group market:
(1) Policy year.
(2) Segment type.
(3) Product type.
(4) Number of policyholders.
(5) Number of covered lives affected.
(6) The insurer's average rate increase by the following:
(A) Policy year.
(B) Segment type.
(C) Product type.
(D) Benefit category, including, but not limited to, hospital,
medical, ancillary, and other benefit categories reported publicly
for individual and small employer rate filings.
(E) Trend attributable to cost and trend attributable to
utilization by benefit category.
(e) A health insurer that is unable to provide information on rate
increases by benefit categories, including, but not limited to,
hospital, outpatient medical, and mental health, or information on
trend attributable to cost and trend attributable to utilization by
benefit category pursuant to subdivision (d), shall disclose annually
all of the following aggregate data for its large group health
insurance policies:
(1) The insurer's overall aggregate data demonstrating or
reasonably estimating year-to-year cost increases in the aggregate
for large group rates by major service category. The insurer shall
distinguish between the increase ascribed to the volume of services
provided and the increase 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) An insurer 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 projected trend attributable to the following
categories:
(A) Use of services by service and disease category.
(B) Capital investment.
(C) Community benefit expenditures, excluding bad debt and valued
at cost.
(4) The amount and proportion of costs attributed to contracting
medical groups that would not have been attributable as medical
losses if incurred by the health insurer rather than the medical
group.
(f) (1) A health insurer that exclusively contracts with no more
than two medical groups in the state to provide or arrange for
professional medical services for the insureds of the insurer shall
provide claims data at no charge to a large group purchaser annually
if the large group purchaser requests the information. The health
insurer 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 10181.7.
(3) If claims data are not available, the insurer 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
insurers and 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 insurer to comply with risk
adjustment, reinsurance, or risk corridors as required by 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 insurer 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-sponsored plan with an enrollment of greater than 1,000
covered lives or a multiemployer trust.
(d)
( g) The department may require all health
insurers 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. SEC. 3. 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.