Amended in Assembly July 1, 2014

Amended in Senate April 9, 2014

Senate BillNo. 964


Introduced by Senator Hernandez

February 10, 2014


An act to amend Section 1367.03 of, to add Sections 1380.4, 1380.5, 1380.6, and 1380.7 to, and to repeal Section 1380.3 of, the Health and Safety Code, and tobegin delete amend Section 14087.95 ofend deletebegin insert add Section 14456.3 toend insert the Welfare and Institutions Code, relating to health care coverage.

LEGISLATIVE COUNSEL’S DIGEST

SB 964, as amended, Hernandez. begin deleteHealth care service plans: timeliness standards: medical surveys. end deletebegin insertHealth care coverage.end insert

begin delete

Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. One of the methods by which Medi-Cal services are provided is pursuant to contracts with various types of managed health care plans, including through county organized health systems. Existing law specifies that these county organized health systems are exempt from the Knox-Keene Health Care Service Plan Act of 1975.

end delete

Existing law, the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene Act), 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 the department to adopt standards for timeliness of access to care and requires that contracts between health care service plans and providers ensure compliance with those standards. Existing law requires health care service plans to annually report to the department on compliance with those standards in a manner specified by the department. Under existing law, every 3 years, the department is required to review information regarding compliance with those standards and make recommendations for changes that further protect enrollees.

begin delete

This bill would eliminate the requirement that the department make recommendations for changes that further protect enrollees, would require the department to review information regarding compliance with the timeliness standards, including any waivers or alternative standards granted to plans, on an annual basis, and would require the department to annually post its findings from that review on its Internet Web site commencing December 1, 2016. The bill would require health care service plans, in making reports to the department on compliance with the timeliness standards, to use standardized survey methodology if developed by the department. The bill would also require a contract between a county organized health systems established under the Medi-Cal program and a provider to ensure compliance with the timeliness standards adopted by the department and would require the county organized health system to annually report to the department on compliance with those standards. By expanding the scope of a crime and imposing a new duty on counties, the bill would impose a state-mandated local program.

end delete
begin insert

This bill would instead require the department to conduct that review annually. The bill would also require health care service plans, in making reports to the department on compliance with the timeliness standards, to use standardized survey methodology if developed by the department. Because a violation of that requirement would be a crime, the bill would impose a state-mandated local program.

end insert

begin insertExisting law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. One of the methods by which Medi-Cal services are provided is pursuant to contracts with various types of managed health care plans. end insertExisting law establishes the California Health Benefit Exchange for the purpose of facilitating the enrollment of qualified individuals and small employers in qualified health plans. The Knox-Keene Act requires the department to periodically conduct an onsite medical survey of the health delivery system of each health care service plan and exempts a plan that provides services solely to Medi-Cal beneficiaries from the survey upon submission to the department the medical survey audit conducted by the State Department of Health Care Services as part of the Medi-Cal contracting process.

This bill would eliminate that exemption, would require a plan that provides services to Medi-Cal beneficiaries and a plan that provides services to enrollees in the California Health Benefit Exchange to be surveyed by those product lines distinct from other product lines and to be annually reviewed with respect to those product lines for compliance with accessibility and availability of services, continuity of care, and quality management, as specified. The bill would also require a plan that provides services to Medi-Cal beneficiaries through specified programs to be surveyed annually with respect to the populations enrolled in those products until 5 years after completion of initial enrollment in those products, as specified. The bill wouldbegin delete authorizeend deletebegin insert requireend insert the department to coordinate these surveys and reviews conducted with respect to Medi-Cal managed care plans with the State Department of Health Care Services, provided that the coordination does not result in a delay of the surveys or reviews or the failure of the department to conduct the surveys or reviews.

begin delete

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.

end delete
begin delete

This bill would provide that with regard to certain mandates no reimbursement is required by this act for a specified reason.

end delete
begin delete

With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

end delete
begin insert

This bill would also require the State Department of Health Care Services to post its medical survey audit findings of Medi-Cal managed care plans on its Internet Web site and to share those findings and other information with respect to Knox-Keene plans with the Department of Managed Health Care.

end insert
begin insert

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.

end insert
begin insert

This bill would provide that no reimbursement is required by this act for a specified reason.

end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

P4    1

SECTION 1.  

Section 1367.03 of the Health and Safety Code
2 is amended to read:

3

1367.03.  

(a) Not later than January 1, 2004, the department
4shall develop and adopt regulations to ensure that enrollees have
5access to needed health care services in a timely manner. In
6developing these regulations, the department shall develop
7indicators of timeliness of access to care and, in so doing, shall
8consider the following as indicators of timeliness of access to care:

9(1) Waiting times for appointments with physicians, including
10primary care and specialty physicians.

11(2) Timeliness of care in an episode of illness, including the
12timeliness of referrals and obtaining other services, if needed.

13(3) Waiting time to speak to a physician, registered nurse, or
14other qualified health professional acting within his or her scope
15of practice who is trained to screen or triage an enrollee who may
16need care.

17(b) In developing these standards for timeliness of access, the
18department shall consider the following:

19(1) Clinical appropriateness.

20(2) The nature of the specialty.

21(3) The urgency of care.

22(4) The requirements of other provisions of law, including
23Section 1367.01 governing utilization review, that may affect
24timeliness of access.

25(c) The department may adopt standards other than the time
26elapsed between the time an enrollee seeks health care and obtains
27care. If the department chooses a standard other than the time
28elapsed between the time an enrollee first seeks health care and
29obtains it, the department shall demonstrate why that standard is
30more appropriate. In developing these standards, the department
31shall consider the nature of the plan network.

32(d) The department shall review and adopt standards, as needed,
33concerning the availability of primary care physicians, specialty
34physicians, hospital care, and other health care, so that consumers
35have timely access to care. In so doing, the department shall
36consider the nature of physician practices, including individual
37and group practices as well as the nature of the plan network. The
38department shall also consider various circumstances affecting the
P5    1delivery of care, including urgent care, care provided on the same
2day, and requests for specific providers. If the department finds
3that health care service plans and health care providers have
4difficulty meeting these standards, the department may make
5recommendations to the Assembly Committee on Health and the
6Senate Committee on Insurance of the Legislature pursuant to
7subdivision (i).

8(e) In developing standards under subdivision (a), the department
9shall consider requirements under federal law, requirements under
10other state programs, standards adopted by other states, nationally
11recognized accrediting organizations, and professional associations.
12The department shall further consider the needs of rural areas,
13specifically those in which health facilities are more than 30 miles
14apart and any requirements imposed by the State Department of
15Health Care Services on health care service plans that contract
16with the State Department of Health Care Services to provide
17Medi-Cal managed care.

18(f) (1) Contracts between health care service plans and health
19care providers shall ensure compliance with the standards
20developed under this section. These contracts shall require
21reporting by health care providers to health care service plans and
22by health care service plans to the department to ensure compliance
23with the standards.

24(2) Health care service plans shall report annually to the
25department on compliance with the standards in a manner specified
26by the department. The reported information shall allow consumers
27to compare the performance of plans and their contracting providers
28in complying with the standards, as well as changes in the
29compliance of plans with these standards.

30(3) In making reports to the department pursuant to this
31subdivision, health care service plans shall use standardized survey
32methodology if developed by the department.

33(g) (1) When evaluating compliance with the standards, the
34department shall focus more upon patterns of noncompliance rather
35than isolated episodes of noncompliance.

36(2) The director may investigate and take enforcement action
37against plans regarding noncompliance with the requirements of
38this section. Where substantial harm to an enrollee has occurred
39as a result of plan noncompliance, the director may, by order,
40assess administrative penalties subject to appropriate notice of,
P6    1and the opportunity for, a hearing in accordance with Section 1397.
2The plan may provide to the director, and the director may
3 consider, information regarding the plan’s overall compliance with
4the requirements of this section. The administrative penalties shall
5not be deemed an exclusive remedy available to the director. These
6penalties shall be paid to the Managed Care Administrative Fines
7and Penalties Fund and shall be used for the purposes specified in
8Section 1341.45. The director shall periodically evaluate grievances
9to determine if any audit, investigative, or enforcement actions
10should be undertaken by the department.

11(3) The director may, after appropriate notice and opportunity
12for hearing in accordance with Section 1397, by order, assess
13administrative penalties if the director determines that a health
14care service plan has knowingly committed, or has performed with
15a frequency that indicates a general business practice, either of the
16following:

17(A) Repeated failure to act promptly and reasonably to assure
18timely access to care consistent with this chapter.

19(B) Repeated failure to act promptly and reasonably to require
20contracting providers to assure timely access that the plan is
21required to perform under this chapter and that have been delegated
22by the plan to the contracting provider when the obligation of the
23plan to the enrollee or subscriber is reasonably clear.

24(C) The administrative penalties available to the director
25pursuant to this section are not exclusive, and may be sought and
26employed in any combination with civil, criminal, and other
27administrative remedies deemed warranted by the director to
28enforce this chapter.

29(4) The administrative penalties shall be paid to the Managed
30Care Administrative Fines and Penalties Fund and shall be used
31for the purposes specified in Section 1341.45.

32(h) The department shall work with the patient advocate to
33assure that the quality of care report card incorporates information
34provided pursuant to subdivision (f) regarding the degree to which
35health care service plans and health care providers comply with
36the requirements for timely access to care.

37(i) The department shall annually review information regarding
38compliance with the standards developed under this section begin delete,
39including any waivers or alternative standards granted to a plan
40pursuant to this section. By December 1, 2016, and annually
P7    1thereafter, the department shall post its findings from that review
2on its Internet Web siteend delete
begin insert and shall make recommendations for
3changes that further protect enrolleesend insert
.

4

SEC. 2.  

Section 1380.3 of the Health and Safety Code is
5repealed.

6

SEC. 3.  

Section 1380.4 is added to the Health and Safety Code,
7to read:

8

1380.4.  

A plan that provides services to Medi-Cal beneficiaries
9pursuant to Chapter 8 (commencing with Section 14200) of Part
103 of Division 9 of the Welfare and Institutions Code shall do both
11of the following:

12(a) Be surveyed under Section 1380 by its Medi-Cal managed
13care productbegin delete lineend deletebegin insert linesend insert distinct from its other product lines, if any,
14in order to determine whether the services received by Medi-Cal
15beneficiaries comply with the requirements of this chapter.

16(b) begin insert(1)end insertbegin insertend insert Be annually reviewed, with respect to its Medi-Cal
17managed care product lines, for compliance with all of the
18following:

begin delete

19(1)

end delete

20begin insert(A)end insert Accessibility and availability of services, including network
21adequacy and timely access to care.

begin delete

22(2)

end delete

23begin insert(B)end insert Continuity of care.

begin delete

24(3)

end delete

25begin insert(C)end insert Qualitybegin delete management, including precautions to ensure that
26appropriate care is not withheld or delayed for any reason.end delete

27begin insert management.end insert

begin insert

28(2) This subdivision shall not be construed to require an onsite
29survey in addition to the survey required by Section 1380.

end insert
begin insert

30(3) The department may conduct the annual review required by
31this subdivision through telephonic or other means and is not
32required to perform the review onsite, unless the director
33determines that an onsite review is necessary.

end insert
begin insert

34(4) In conducting the annual review required by this subdivision,
35the department shall maximize the use of all relevant existing
36reports and information already submitted to the department by
37the plan and, if applicable, the outcomes of medical survey audits
38and monthly provider files provided to the department by the
39Department of Health Care Services pursuant to Section 14456.3
40of the Welfare and Institutions Code. This paragraph shall not
P8    1limit the authority of the department to request additional
2information from the plan as deemed necessary to carry out and
3complete the annual review required by this subdivision and any
4enforcement action initiated as a result of the review.

end insert
5

SEC. 4.  

Section 1380.5 is added to the Health and Safety Code,
6to read:

7

1380.5.  

(a) A plan that provides services to enrollees in the
8California Health Benefit Exchange pursuant to Title 22
9(commencing with Section 100500) of the Government Code shall
10do both of the following:

11(1) Be surveyed under Section 1380 by its productbegin delete lineend deletebegin insert linesend insert
12 sold through the Exchange distinct from its productbegin delete lineend deletebegin insert linesend insert sold
13outside the Exchange, if any, in order to determine whether the
14services received by the Exchange enrollees comply with the
15requirements of this chapter.

16(2) begin insert(A)end insertbegin insertend insert Be annually reviewed, with respect to its productbegin delete lineend delete
17begin insert linesend insert sold through the Exchange, for compliance with all of the
18following:

begin delete

19(A)

end delete

20begin insert(i)end insert Accessibility and availability of services, including network
21adequacy and timely access to care.

begin delete

22(B)

end delete

23begin insert(ii)end insert Continuity of care.

begin delete

24(C)

end delete

25begin insert(iii)end insert Qualitybegin delete management, including precautions to ensure that
26appropriate care is not withheld or delayed for any reason.end delete

27begin insert management.end insert

begin insert

28(B) This paragraph shall not be construed to require an onsite
29survey in addition to the survey required by Section 1380.

end insert
begin insert

30(C) The department may conduct the annual review required
31by this paragraph through telephonic or other means and is not
32required to perform the review onsite, unless the director
33determines that an onsite review is necessary.

end insert
begin insert

34(D) In conducting the annual review required by this paragraph,
35the department shall maximize the use of all relevant existing
36reports and information already submitted to the department by
37the plan and, if applicable, the outcomes of medical survey audits
38and monthly provider files provided to the department by the
39Department of Health Care Services pursuant to Section 14456.3
40of the Welfare and Institutions Code. This subparagraph shall not
P9    1limit the authority of the department to request additional
2information from the plan as deemed necessary to carry out and
3complete the annual review required by this paragraph and any
4enforcement action initiated as a result of the review.

end insert

5(b) This section shall not apply to either of the following:

6(1) A plan that uses the same network for its productbegin delete lineend deletebegin insert linesend insert
7 soldbegin insert in the individual and small group markets end insertthrough the
8Exchange as the network used for its productbegin delete lineend deletebegin insert linesend insert soldbegin insert in the
9individual and small group markets end insert
outside the Exchange.

10(2) A plan that uses the same network for its productbegin delete lineend deletebegin insert linesend insert
11 sold through the Exchange as the network used for its Medi-Cal
12managed care productbegin delete lineend deletebegin insert linesend insert.

13

SEC. 5.  

Section 1380.6 is added to the Health and Safety Code,
14to read:

15

1380.6.  

A plan that enrolls Medi-Cal beneficiaries as a result
16of any of the following shall be surveyed annually under Section
171380 with respect to the populations enrolled in those products
18until five years after the completion of initial enrollment under
19those products:

20(a) The transition of Healthy Families Program enrollees to the
21Medi-Cal program pursuant to Chapter 16.2 (commencing with
22Section 12694.1) of Part 6.2 of Division 2 of the Insurance Code.

23(b) Article 2.82 (commencing with Section 14087.98) of Chapter
247 of Part 3 of Division 9 of the Welfare and Institutions Code.

25(c) Section 14182 of the Welfare and Institutions Code.

26(d) Sections 14182.16 and 14182.17, or Section 14132.275, of
27the Welfare and Institutions Code.

28

SEC. 6.  

Section 1380.7 is added to the Health and Safety Code,
29to read:

30

1380.7.  

The departmentbegin delete mayend deletebegin insert shallend insert coordinate the surveys and
31reviews conducted pursuant to Sections 1380.4 and 1380.6 with
32the State Department of Health Care Services in order to allow for
33simultaneous oversight of Medi-Cal managed care plans by both
34departments, provided that this coordination does not result in a
35delay of the surveys or reviews required under Sections 1380.4
36and 1380.6 or in the failure of the department to conduct those
37surveys or reviews.

begin delete
38

SEC. 7.  

Section 14087.95 of the Welfare and Institutions Code
39 is amended to read:

P10   1

14087.95.  

(a) Counties contracting with the department
2pursuant to this article shall be exempt from the provisions of
3Chapter 2.2 (commencing with Section 1340) of Division 2 of the
4Health and Safety Code for purposes of carrying out the contracts.

5(b) Notwithstanding subdivision (a), a county contracting with
6the department pursuant to this article shall, for purposes of
7carrying out that contract, be treated as a health care service plan
8under, and comply with, subdivision (f) of Section 1367.03 of the
9Health and Safety Code.

10

SEC. 8.  

No reimbursement is required by this act pursuant to
11Section 6 of Article XIII B of the California Constitution for certain
12costs that may be incurred by a local agency or school district
13because, in that regard, this act creates a new crime or infraction,
14eliminates a crime or infraction, or changes the penalty for a crime
15or infraction, within the meaning of Section 17556 of the
16Government Code, or changes the definition of a crime within the
17meaning of Section 6 of Article XIII B of the California
18Constitution.

19However, if the Commission on State Mandates determines that
20this act contains other costs mandated by the state, reimbursement
21to local agencies and school districts for those costs shall be made
22pursuant to Part 7 (commencing with Section 17500) of Division
234 of Title 2 of the Government Code.

end delete
24begin insert

begin insertSEC. 7.end insert  

end insert

begin insertSection 14456.3 is added to the end insertbegin insertWelfare and Institutions
25Code
end insert
begin insert, to read:end insert

begin insert
26

begin insert14456.3.end insert  

(a) The department shall share with the Department
27of Managed Health Care its findings from medical survey audits
28and monthly provider files of a Medi-Cal managed care plan that
29provides services to Medi-Cal beneficiaries pursuant to Chapter
307 (commencing with Section 14000) or this chapter and is subject
31to Chapter 2.2 (commencing with Section 1340) of Division 2 of
32the Health and Safety Code.

33(b) The department shall post on its Internet Web site its findings
34from medical survey audits of a Medi-Cal managed care plan that
35provides services to Medi-Cal beneficiaries pursuant to Chapter
367 (commencing with Section 14000) or this chapter.

end insert
37begin insert

begin insertSEC. 8.end insert  

end insert
begin insert

No reimbursement is required by this act pursuant to
38Section 6 of Article XIII B of the California Constitution because
39the only costs that may be incurred by a local agency or school
40district will be incurred because this act creates a new crime or
P11   1infraction, eliminates a crime or infraction, or changes the penalty
2for a crime or infraction, within the meaning of Section 17556 of
3the Government Code, or changes the definition of a crime within
4the meaning of Section 6 of Article XIII B of the California
5Constitution.

end insert


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