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
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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.
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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
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of their networks, which they state would depart significantly
from current practice.
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081