BILL ANALYSIS Ó
SB 964
Page 1
Date of Hearing: June 24, 2014
ASSEMBLY COMMITTEE ON HEALTH
Richard Pan, Chair
SB 964 (Ed Hernandez) - As Amended: April 9, 2014
SENATE VOTE : 22-10
SUBJECT : Health care service plans: timeliness standards:
medical surveys.
SUMMARY : Requires the Department of Managed Health Care (DMHC)
to survey Medi-Cal managed care (MCMC) plans and plans sold
through Covered California to by product line, requires DMHC to
annually review these plans for compliance with specified
standards regarding timely access, network adequacy, continuity
of care, and quality management, and requires annual surveys of
health care service plans serving specified Medi-Cal
populations. Specifically, this bill :
1)Requires health care service plans to use a standardized
survey methodology, if developed by DMHC, when making their
annual reports on compliance with timely access standards.
2)Requires DMHC to annually, rather than every three years,
review information received from health care service plans
regarding compliance with timely access standards, including
any waivers or alternative standards granted to a health care
service plan. Requires DMHC, by December 1, 2016, and
annually thereafter, to post its findings from the review on
its website.
3)Repeals a provision of the Knox-Keene Health Care Service Plan
Act of 1975 (Knox-Keene), the body of law governing health
care service plans, that, exempts a health plan that provides
services solely to Medi-Cal beneficiaries from DMHC medical
survey requirements upon submission to DMHC of a medical
survey audit conducted for the same period by the Department
of Health Care Services (DHCS) as part of the Medi-Cal
contracting process.
4)Requires a MCMC plan to receive a medical survey by DMHC by
MCMC product line, distinct from other product lines, if any,
in order to determine whether services received by Medi-Cal
beneficiaries comply with Knox-Keene.
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5)Requires a MCMC plan to receive an annual review by DMHC, with
respect to MCMC product lines, to determine if the plan is in
compliance with requirements for:
a) Accessibility and availability of services, including
network adequacy and timely access to care;
b) Continuity of care; and,
c) Quality management, including precautions to ensure that
appropriate care is not withheld or delayed for any reason.
6)Requires that a health care service plan in the California
Health Benefit Exchange (Exchange now called Covered
California), receive a medical survey by DMHC by product lines
sold through the Exchange, distinct from any product lines
sold outside of the Exchange, in order to determine whether
services received by plan enrollees comply with Knox-Keene.
7)Requires these plans to receive an annual review by DMHC, with
respect to product lines sold in the Exchange for compliance
with requirements for:
a) Accessibility and availability of services, including
network adequacy and timely access to care;
b) Continuity of care; and,
c) Quality management, including precautions to ensure that
appropriate care is not withheld or delayed for any reason.
8)Exempts from the requirement for DMHC medical survey of
distinct product lines, and for annual review of compliance
with the specified requirements regarding accessibility of
services, continuity of care, and quality management, a health
care service plan that uses the same network for its product
line sold through the Covered California as the network used
for its product line sold outside of the Covered California,
as well as a health care service plan that uses the same
network for its product line sold through Covered California
as the network used for its MCMC product line.
9)Requires a MCMC plan that enrolls beneficiaries as a result of
any of the following transitions to be surveyed annually with
respect to the transition populations for the first five years
after initial enrollment:
a) The transition of the Healthy Families Program (HFP);
b) Managed care expansion of seniors and persons with
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disabilities (SPDs);
c) Managed care expansion in rural counties; and,
d) The Coordinated Care Initiative (CCI).
10)Authorizes DMHC and DHCS to coordinate surveys and reviews in
order to allow for simultaneous oversight of MCMC plans,
provided that the coordination does not cause delay of surveys
or reviews, or the failure of DMHC to conduct those surveys or
reviews.
11)Requires a County Organized Health System (COHS) to be
treated as a health care service plan with respect to
compliance with timely access standards under Knox-Keene.
EXISTING LAW :
1)Establishes the Medi-Cal program, administered by DHCS, under
which qualified low-income individuals receive health care
services.
2)Establishes Covered California which facilitates the
enrollment of qualified individuals and small employers in
qualified health plans.
3)Sets forth Knox-Keene which provides for the licensure and
regulation of health care service plans by DMHC.
4)Requires DMHC to develop and adopt regulations for timeliness
of access to care, and requires contracts between health care
service plans and providers ensure compliance with those
standards.
5)Requires health care service plans to annually report to DMHC
on compliance with timely access standards, and requires DMHC
to, every three years, review information regarding compliance
with those standards and make recommendations that would
further protect health care service plan enrollees.
6)Requires DMHC to periodically conduct an onsite medical survey
of the health delivery system of each health care service
plan. Requires the survey to be conducted as often as
necessary, but not less frequently than every three years, and
to include a review of the procedures for obtaining health
services, the procedures for regulating utilization, peer
review mechanisms, internal procedures for assuring quality of
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care, and the overall performance of the plan in providing
health care benefits and meeting the health care needs of
enrollees.
7)Exempts, as specified, health care service plans that provide
services solely to Medi-Cal beneficiaries from the onsite
medical survey requirement upon submission to DMHC of a
medical survey audit conducted for the same survey period by
DHCS as a part of the Medi-Cal contracting process.
8)Requires DHCS to conduct annual medical audits of each MCMC
plan unless the Director of DHCS determines that there is good
cause for additional review, and for the reviews to use the
standards and criteria set forth in Knox-Keene, or the
Insurance Code, as appropriate. Requires, except in instances
where major unanticipated administrative obstacles prevent, or
after a determination by the Director of DHCS of good cause,
the reviews to be carried out jointly with reviews conducted
pursuant to Knox-Keene or the Insurance Code, as specified.
9)Authorizes DHCS to contract with professional organizations or
DMHC or the California Department of Insurance (CDI), to
perform the annual MCMC plan reviews, and requires DHCS or its
designee to make a finding of fact with respect to the plan's
ability to provide quality health care services, effectiveness
of peer review, utilization control mechanisms, and the
overall performance in providing health care benefits to
enrollees.
10)Authorizes the establishment of COHS by county Boards of
Supervisors in order to contract with the Medi-Cal program to
operate a managed care program. Exempts COHS from requires
for Knox-Keene licensure as a health care service plan.
FISCAL EFFECT : According to the Senate Appropriations
Committee, this bill would result in annual costs of
approximately $4.5 million per year to develop regulations,
respond to complaints, and enforce requirements of the bill by
DMHC; this bill would also have no significant impact to the
Medi-Cal program, as DHCS does not expect additional survey and
reporting requirements in this bill to significantly increase
costs to the MCMC plans.
COMMENTS :
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1)PURPOSE OF THIS BILL . According to the author, this bill will
ensure that DMHC surveys take into consideration requirements
unique to certain public program managed care enrollees and
health insurance products sold through Covered California, and
that sufficient attention and resources are given to health
plan network adequacy and timely access enforcement. The
author cites media reports raising concerns about lack of
access to health care providers and narrow provider networks,
and questions from Covered California has about accuracy of
provider directories, areas in the state with more timely
access problems, physician confusion about network status, and
confusion about benefit design. The author states that
California has strong network adequacy and timely access
requirements health plans must follow, but monitoring and
enforcement of these laws is developing at the same time
millions of new individuals are enrolling in MCMC and Covered
California plans. The author states that this bill is
intended to clarify distinctions in enforcement responsibility
and ensure tools are in place so that the DMHC can monitor and
enforce adequate network and timely access requirements. The
author concludes by stating that having an insurance card only
ensures better health outcomes if patients actually have
access to the right care at the right place at the right time.
2)BACKGROUND .
a) Network adequacy. With the implementation of the federal
Patient Protection and Affordable Care Act (ACA) nearly 3.5
million Californians have enrolled in health coverage
through Covered California and MCMC. As of April 17, 2014,
nearly 1.4 million Californians enrolled in plans through
Covered California, and over 1.9 million enrolled in
Medi-Cal (including 650,000 who transitioned from the
Low-Income Health Program). Further, there are currently
approximately 900,000 Medi-Cal applications pending.
According to the Legislative Analyst's Office, roughly 73%
of Medi-Cal beneficiaries will be enrolled in managed care
in 2014-15. With the growth in managed care through
Covered California and MCMC, much attention is being paid
to provider network adequacy, especially in light of
consumer complaints about losing access to providers and
not being able to find providers who are in their plan's
networks.
In an effort to contain health care costs, and keep premiums
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low, some health care service plans sold plans with a
narrowed list of providers for enrollees to choose from.
At Covered California's April 17, 2014 Board meeting, staff
reviewed its contractual expectations for quality and
access and shared with the board and public concerns being
raised about the accuracy of certain plan provider
directories, timely access to available providers,
including specialists, and rural counties and other areas
such as Alameda County where there are higher
concentrations of consumer complaints. According to
Covered California, it is actively monitoring to assure
networks are adequate to assure consumers are getting
timely access to care. In the first quarter of 2014,
approximately 200 complaints related to access to care in
Covered California plans were filed with DMHC.
b) Timely access standards. DMHC's timely access standards
became effective in January 2010, and are designed to
ensure enrollees access necessary health care services in a
timely manner. All health care service plans licensed by
DMHC are required to implement policies, procedures and
systems to ensure compliance with the standards and to
demonstrate that all standards have been met. Further,
each health care service plan must demonstrate that its
provider network is large and varied enough to offer
appointment times that meet specified standards, including
standards that require plans to be offered appointments
within a time period appropriate for their condition, and
quality assurance standards requiring that enrollees be
offered appointments within specified time-elapsed
standards, e.g. an appointment time within 48 hours of a
request for urgent care, or an appointment time within 10
business days of a request for non-urgent primary care
appointments.
The timely access standards require plans to contract with
adequate numbers of doctors or other health care providers
in each geographic area they serve in order to meet the
clinical and time-elapsed standards for appointment waiting
times. If timely appointments are not available in a
particular area, even areas with provider shortages, plans
must refer enrollees to, or in the case of a preferred
provider network, assist enrollees in locating, available
and accessible contracted providers in neighboring service
areas.
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Health care service plans must monitor network compliance
with timely access standards, and investigate and correct
deficiencies. DMHC informs plans that their interpretation
of the full time equivalent basis and 1:2,000 means that a
primary care provider cannot be assigned more than 2,000
enrollees based upon all plans and product types that
primary care provider contracts to accept. Health plans
are also required to annually file annual timely access
compliance reports with DMHC. DMHC began collecting these
reports in 2012. However, in the absence of a standardized
survey methodology for plans to use in determining their
compliance, data submitted to DMHC varied greatly between
plans, and in some cases was questionable as to its
statistical validity. Since the receipt of these first
reports in 2012, DMHC developed a standardized survey
methodology for plans to use when making the timely access
compliance reports. The standardized survey methodology is
available on DMHC's website, and DMHC encourages plans to
use the survey methodology to ensure the information the
plans provide is statistically sound, and can be easily
compared to other plans.
c) Health care service plan oversight. According to the
Legislative Analyst's Office, both Knox-Keene and MCMC
contracts contain a variety of requirements intended to
ensure that managed care plans are providing enrollees with
adequate access to care. For example, regulations
implementing Knox- Keene establish three main categories of
standards that plans must follow to demonstrate adequate
access. These are: i) minimum ratios of full-time
equivalent providers to enrollees; ii) maximum distances
between primary care providers and enrollees' residences
and workplaces; and, iii) limits on enrollee wait times for
appointment and referrals. DMHC is required to conduct an
onsite medical survey of a health care service plan at
least once every three years, during which it surveys the
plan for compliance with a variety of Knox-Keene
requirements, including whether plans provide timely
access.
DHCS monitors additional contract-specific requirements
related to access, often with the DMHC's assistance under
interagency agreements. These additional requirements may
account for - among other areas - the number of network
providers who are not accepting new patients, the location
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and types of specialists within the network (with specific
requirements that depend on the characteristics and health
needs of the plan's enrollees), and coverage of
out-of-network services that the plan may be unable to
provide. Both departments conduct various activities to
monitor access to care, including quarterly reviews of
provider network data submitted by plans, help lines that
may identify early access problems through beneficiary
complaints, and periodic on-site audits of plans'
operations.
According to DHCS, since 2012, DMHC and DHCS have coordinated
the timing of plan surveys when possible so as to avoid
subjecting plans to two separate survey processes. Because
DMHC surveys on triennial schedule, and DHCS surveys on an
annual schedule, it is likely that a given plan will be
surveyed simultaneously by both departments once every
three years, unless DMHC surveys more often which they are
authorized to do under the law.
Through interagency agreements, DMHC is contracted by DHCS to
perform specified oversight responsibilities with regard to
specific Medi-Cal enrollee populations transitioning into
MCMC plans, including SPDs, former HFP enrollees, Medi-Cal
beneficiaries in the rural managed care expansion, and
enrollees in the Coordinated Care Initiative (CCI). Recent
health trailer bill language explicitly requires DHCS to
contract with DMHC to, on its behalf, conduct financial
audits, medical surveys, and a review of the provider
networks of MCMC plans serving SPDs, and enrollees in CCI
and rural managed care expansion. The interagency
agreement must be updated on an annual basis in order to
maintain clarity regarding the roles and responsibilities
of each department with regard to these oversight
activities. Some of the contracted duties to be performed
by DMHC are financial audits, medical surveys, plan
readiness review, and review of the adequacy of managed
care health plan provider networks. The frequency by which
DMHC performs these duties is specific to each contract.
For example, the interagency agreement pertaining to CCI
enrollees and SPDs would require DMHC to perform a network
adequacy review on a quarterly basis, and to perform a
medical survey once every three years.
d) COHS. In California, COHSs serve approximately 1.3
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million beneficiaries through six health plans in 14
counties: Marin, Mendocino, Merced, Monterey, Napa, Orange,
San Mateo, San Luis Obispo, Santa Barbara, Santa Cruz,
Solano, Sonoma, Ventura, and Yolo. In the COHS model, DHCS
contracts with a health plan established by the county's
Board of Supervisors and all Medi-Cal enrollees are in the
same health plan. Unlike other MCMC plans, COHS are exempt
from licensure under Knox-Keene and are therefore not
required to be regulated by DMHC, but their contract with
DHCS requires them to meet most of the Knox-Keene
requirements.
3)SUPPORT . Health Access California, the bill's sponsor, states
that, despite the fact that more than 70% of Medi-Cal
enrollees are in managed care, and approximately half of the
consumers DMHC is responsible for protecting are enrolled in
MCMC, neither DMHC nor DHCS conduct ongoing monitoring of
timeliness of access or adequacy of networks for the MCMC line
of business. Further, in its medical audits, DHCS does not
check for compliance with California regulations on timely
access or conduct ongoing monitoring of network adequacy or
continuity of care. Health Access states that the provisions
of this bill will address these problems by eliminating
provisions in existing law that exempt MCMC plans from DMHC
surveys, requiring annual reviews of availability and
accessibility, continuity of care, and quality management to
be done by MCMC and Covered California product lines,
requiring full medical surveys for MCMC plans serving major
Medi-Cal transition populations, apply timely access standards
to COHS, and allow coordination of oversight between DMHC and
DHCS.
The California Medical Association states that the California
has embarked on a huge expansion of MCMC, that concerns have
been raised about whether the necessary provider
infrastructure is in place to care for the specialized needs
of these populations, and that given the number of
Californians in MCMC and Covered California, the provisions of
this bill will help ensure timely, accessible, and affordable
care. The National Health Law Program states that, by
reviewing plan's Medi-Cal and Covered California lines of
business distinct from any other lines, DMHC will be able to
identify and address inadequacies or deficiencies related to
those products. The Western Center on Law and Poverty states
that while we have seen increased collaboration between DMHC
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and DHCS in overseeing MCMC plans, this joint oversight and
responsibilities of each entity should be formalized and
required as this bill does.
4)CONCERNS . The Local Health Plans of California (LHPC) states
that it is unclear how this bill will better coordinate or
streamline the existing audit processes between DHCS and DMHC,
and that while they are aware of existing interagency
agreements between the two departments to conduct joint
surveys whenever possible, the local health plans are also
subject to separate audits and ad-hoc reports that are not
coordinated. LHPC states that its most significant concern
with the bill is that it will create an additional layer of
audits to ensure other audits have been conducted, and cites
examples of plans being audited 16 or 17 times over the span
of three to four years by different federal and state
agencies. LHPC states that provisions in the bill requiring
COHS to comply with timely access standards are not necessary
because compliance is already contractually required for all
MCMC plans. LHPC concludes by stating that its main concern
rests on the coordination of these audits to ensure efficient
and effective oversight of the programs they administer.
5)OPPOSITION . The California Association of Health Plans (CAHP)
states that this bill will increase the administrative load on
health plans by subjecting them to redundant and burdensome
reporting and onsite medical surveys for separate products
including new surveys for Exchange and MCMC plans. CAHP
argues that health plans are held strictly accountable for
enrollee access through regulation, statute, and contracts
with state entities like Covered California and Medi-Cal.
CAHP states that plans must file their entire provider
network, GeoAcces standards and maps (plotting the location of
all providers and enrollees in a region), and methodologies
for ensuring timely access to care. Additionally, CAHP states
that health plans must file several weekly, monthly,
quarterly, or annual reports as a part of routine health plan
operations, and several of the topics DMHC would survey under
the bill are already addressed in contracts with sponsoring
entities such as the Exchange or Medi-Cal. CAHP states that
preparing for onsite audits by regulators is very costly, and
it will be burdensome and redundant to undergo more DMHC
surveys for separate product lines as required by this bill.
6)RELATED LEGISLATION .
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a) AB 2400 (Ridley-Thomas) revises the Health Care
Providers' Bill of Rights for health plan and insurer
provider contracts to: i) provide more advanced notice
from a health plan to a provider for a material change to
the provider's contract; ii) allow a provider to refuse a
material change to the contract without terminating the
contract or the provider's eligibility to participate in
other provider networks; and, iii) include a requirement
that a provider agree to accept or participate in other
products or product networks. AB 2400 is currently in the
Senate Health Committee.
b) AB 2533 (Ammiano) requires health plans and insurers
unable to meet timely access standards through contracted
providers to arrange for the provision of services by a
non-contracting provider, as specified, and requires CDI to
adopt new timely access standards for health insurers in
accordance with statutory criteria similar to those
applicable to health plans under DMHC. AB 2533 is
currently in the Senate Health Committee.
7)PREVIOUS LEGISLATION .
a) SB 94 (Committee on Budget and Fiscal Review), Chapter
37, Statutes of 2013, requires DHCS to enter into an
interagency agreement with DMHC to, on its behalf, have
DMHC conduct various oversight functions of MCMC plans
participating in the MCMC expansion into rural counties,
and to transitions of SPDs into MCMC.
b) AB 1494 (Committee on Budget), Chapter 28, Statutes of
2012, requires DHCS, with respect to the transition of
HFP enrollees to MCMC, to consult and collaborate with
DMHC in assessing MCMC plan network adequacy in
accordance with Knox-Keene.
c) AB 1467 (Committee on Budget), Chapter 23, Statutes of
2012, among other provisions, provides for the expansion
of MCMC into the 28 rural counties that are now
fee-for-service.
d) AB 2179 (Cohn), Chapter 797, Statutes of 2002,
requires DMHC and CDI to develop and adopted regulations
to ensure that enrollees have access to needed health
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care services.
8)SUGGESTED AMENDMENT . Pursuant to current law and
regulations, health care services plans are required to
routinely make numerous reports and filings with DMHC, DHCS,
and Covered California, including reports regarding provider
networks, timely access compliance, enrollment, financial
status, grievances, appeals, and others. The aim of this
bill is not to impose require additional reporting by plans,
or additional annual onsite medical surveys, but rather to
improve oversight by health care service plan regulators,
namely DMHC, and ensure that important standards pertaining
to adequate networks and timely access and others are
appropriately monitored in order to protect enrollees in
Covered California and MCMC, including vulnerable MCMC
transition populations. As such, the author may wish to
consider an amendment clarifying that the annual product
line reviews required by the bill shall not be construed to
require an onsite survey pursuant to Health and Safety Code
Section 1380; that DMHC may conduct the annual review
through telephonic or other means, and is not required to
perform the annual review onsite unless deemed necessary;
and, that in conducting the annual review, DMHC shall
maximize the use of all applicable existing reports and
information already submitted by plans. Such an amendment
should ensure that DMHC's authority to request additional
information from the plans as deemed necessary is not
limited so as to protect the department's enforcement
authority.
REGISTERED SUPPORT / OPPOSITION :
Support
Health Access California (sponsor)
AARP
American Federation of State, County, and Municipal Employees,
AFL-CIO
California Academy of Physician Assistants
California Association for Health Services at Home
California Chapter of the American College of Emergency
Physicians
California Coverage and Health Initiatives
California Immigrant Policy Center
California Medical Association
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California Pan-Ethnic Health Network
California Primary Care Association
California State Council of the Service Employees International
Union
Children Now
Children's Defense Fund - California
March of Dimes - California Chapter
Multiple Sclerosis Society
National Association of Social Workers
National Health Law Program
National Multiple Sclerosis Society - California Action Network
PICO California
Private Essential Access Community Hospitals
The Children's Partnership
United Ways of California
Western Center on Law and Poverty
Opposition
California Association of Health Plans
Analysis Prepared by : Kelly Green / HEALTH / (916) 319-2097