BILL ANALYSIS Ó SB 964 Page 1 Date of Hearing: August 6, 2014 ASSEMBLY COMMITTEE ON APPROPRIATIONS Mike Gatto, Chair SB 964 (Hernandez) - As Amended: August 4, 2014 Policy Committee: HealthVote:14-5 Urgency: No State Mandated Local Program: Yes Reimbursable: No SUMMARY This bill increases ongoing oversight of health plans, with a focus on ensuring compliance of plans with existing health care access standards in the Medi-Cal managed care and individual markets. Specifically, this bill: 1)Requires Medi-Cal managed care plans to be subject to routine medical surveys by the Department of Managed Health Care (DMHC) by removing a provision in current law that exempts them from survey. 2)Authorizes DMHC to develop standardized reporting methodologies for timely access reporting, requires plans to use standardized reporting methodologies, and requires the methodologies to be sufficient to determine compliance with standards for different networks, if plans use different networks for Medi-Cal or individual market products. 3)Requires DMHC to post findings from its timely access to care reviews on its web site, and also to post any waivers or alternate standards approved by the department. 4)Exempts DMHC from the Administrative Procedure Act until January 1, 2020, for guidance issued to implement provision (2), above. 5)Requires plans to provide specified data about networks, including provider location, specialty, admitting privileges, providers with open practices, provider patient capacity, the number of patients assigned to a provider, and complaints regarding timely access and network adequacy a plan received during the previous year. Requires this data to be submitted SB 964 Page 2 separately for Medi-Cal managed care plans or plans offered in the individual market. 6)Requires DMHC to review the data provided in (5) for compliance with network adequacy standards and post reviews on their web site, and requires the Department of Health Care Services (DHCS) to similarly post findings of annual medical audits conducted of Medi-Cal managed care plans. 7)Requires the data be provided and reviews of network adequacy be conducted annually instead of every three years. FISCAL EFFECT 1)One-time costs to DMHC exceeding $200,000 to issue guidance and regulations and to update Information Technology systems, and ongoing costs in the range of $2 million annually to conduct additional reviews of compliance with health care access standards (Managed Care Fund). 2)To the extent greater scrutiny on the adequacy of provider networks in Medi-Cal managed care finds networks are inadequate, potential unknown, significant cost pressure to the state to increase rates paid to managed care plans for care of Medi-Cal beneficiaries (GF/federal funds). COMMENTS 1)Purpose . The author contends California has strong network adequacy and timely access requirements health plans must follow, but that monitoring and enforcement could be improved. Specifically, the author believes given concern about access to care in Medi-Cal managed care plans and narrow networks in Covered California, plans' ability to ensure access to care should be examined specific to the product offered in Medi-Cal managed care and Covered California, and apart from the review that applies to a plan's commercial products. In addition, the author contends this bill will clarify enforcement responsibilities between DMHC and DHCS with respect to oversight of Medi-Cal managed care plans. 2)Health Care Access Standards . Health plans regulated by the DMHC must meet network adequacy and timely access standards. SB 964 Page 3 Specific standards have been promulgated through regulation, and require, for example, appointments to be provided within 10 business days of a request for a non-urgent primary care appointment and within 48 hours of a request for an urgent care appointment. Health plans must show their provider networks are large and varied enough to offer enrollees appointments that meet the standards. Despite the existence of these standards, which became effective via regulation in 2010, questions have been raised about compliance and enforcement, particularly for Medi-Cal managed care plans and for plans using "narrow" provider networks in the individual market. By strengthening enforcement and requiring annual review of network adequacy specific to the networks offered in those products, this bill seeks to provide the regulator sufficient data to evaluate concerns about access to care. 3)Medi-Cal Managed Care . This bill removes an exemption for Medi-Cal managed care, subjecting these plans to DMHC review of compliance with standards. Compliance with contractual standards on network adequacy and access to care is currently conducted by the DHCS, which also administers the Medi-Cal program. This bill attempts to address coordination and prevent duplication of effort by requiring DMHC to maximize the use of existing reports and information, including the outcomes of medical audits and monthly provider files provided to DHCS. 4)Related Legislation . 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 Appropriations Committee. 5)Opposition . Health plans oppose this bill, stating it will increase the administrative load on health plans by subjecting them to redundant surveys for separate products, including new surveys for Exchange and MCMC plans. They cite concerns about the five-year exemption from Office of Administrative Law review for DMHC guidance, duplication of workload across agencies, and some of the new data and information requirements. In addition, they question whether language amended in to the bill August 4, 2014 requires prior approval SB 964 Page 4 of their networks, which they state would depart significantly from current practice. Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081