Amended in Senate April 10, 2014

Senate BillNo. 1182


Introduced by Senator Leno

February 20, 2014


An act to amend Sectionsbegin insert 1374.8,end insert 1385.03begin insert,end insert and 1385.04 of the Health and Safety Code, and to amendbegin delete Sectionend deletebegin insert Sections 791.27 andend insert 10181.4 of the Insurance Code, relating to health care coverage.

LEGISLATIVE COUNSEL’S DIGEST

SB 1182, as amended, Leno. Health care coverage: rate review.

Existing law, the federal Patient Protection and Affordable Care Act (PPACA), requires the United States Secretary of Health and Human Services to establish a process for the annual review of unreasonable increases in premiums for health insurance coverage in which health insurance issuers submit to the secretary and the relevant state a justification for an unreasonable premium increase prior to implementation of the increase. 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 also provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan or health insurer in the individual, small group, or large group markets to file rate information with the Department of Managed Health Care or the Department of Insurance. For individual and small group contracts and policies, existing law requires a plan or insurer to file rate information at least 60 days prior to implementing a rate change and requires a plan or insurer to disclose with each filing specified information by aggregate benefit category. Existing law allows a health care service plan that exclusively contracts with no more than 2 medical groups to provide or arrange for professional medical services for enrollees of the plan to meet this requirement by disclosing its actual trend experience for the prior year using benefit categories that are the same or similar to those used by other plans.

This bill would specify the benefit categories to be used for that purpose and would make other related changes.

For large group plan contracts and policies, existing law requires a plan or insurer to file rate information with the department at least 60 days prior to implementing an unreasonable rate increase, as defined in PPACA. Existing law requires the plan or insurer to also disclose specified aggregate data with that rate filing.

This bill would instead require the plan or insurer to file rate information with the department at least 60 days prior to implementing a rate increase that exceeds 5% of the prior year’s rate. The bill would also require that the plan or insurer disclosebegin delete the aggregate data for all rate filings submitted under these provisions on an annual basisend deletebegin insert specified data for each rate filing that exceeds 5% of the prior year’s rate for that group, including, but not limited to, company name and contact information, annual rate, and average rate increase initially requestedend insert. The bill would require a plan or insurer to annually disclose additional aggregate data for all products sold in the large group market and to provide deidentified claims data at no charge to a large group purchaser that requests the information and meets specified conditions.

begin insert

Existing law prohibits, with exceptions, a health care service plan or health insurer from releasing any information to an employer that would directly or indirectly indicate to the employer that an employee is receiving or has received services from a health care provider covered by the plan unless authorized to do so by the employee.

end insert
begin insert

This bill would exempt from the prohibition the release of relevant information for the purposes set forth in the provisions regarding the review of rate increases.

end insert

Because a willful violation of the bill’s requirements by a health care service plan would be a crime, the 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:

P3    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 1374.8 of the end insertbegin insertHealth and Safety Codeend insertbegin insert is
2amended to read:end insert

3

1374.8.  

begin insert(a)end insertbegin insertend insertA health care service plan shall not release any
4information to an employer that would directly or indirectly
5indicate to the employer that an employee is receiving or has
6received services from a health care provider covered by the plan
7unless authorized to do so by the employee. An insurer that has,
8pursuant to an agreement, assumed the responsibility to pay
9compensation pursuant to Article 3 (commencing with Section
103750) of Chapter 4 of Part 1 of Division 4 of the Labor Code, shall
11not be considered an employer for the purposes of this section.
12begin deleteNothingend delete

13begin insert(b)end insertbegin insertend insertbegin insertNothingend insert in this section prohibits a health care service plan
14from releasing relevant information described in this section for
15the purposes set forth in Chapter 12 (commencing with Section
161871) of Part 2 of Division 1 of the Insurance Code.

begin insert

17(c) Nothing in this section prohibits a health care service plan
18from releasing relevant information described in this section for
19the purposes set forth in Article 6.2 (commencing with Section
201385.01).

end insert
21

begin deleteSECTION 1.end delete
22begin insertSEC. 2.end insert  

Section 1385.03 of the Health and Safety Code is
23amended to read:

24

1385.03.  

(a) (1) All health care service plans shall file with
25the department all required rate information for individual and
26small group health care service plan contracts at least 60 days prior
27to implementing any rate change.

28(2) For individual health care service plan contracts, the filing
29shall be concurrent with the notice required under Section 1389.25.

30(3) For small group health care service plan contracts, the filing
31shall be concurrent with the notice required under subdivision (a)
32of Section 1374.21.

33(b) A plan shall disclose to the department all of the following
34for each individual and small group rate filing:

35(1) Company name and contact information.

P4    1(2) Number of plan contract forms covered by the filing.

2(3) Plan contract form numbers covered by the filing.

3(4) Product type, such as a preferred provider organization or
4health maintenance organization.

5(5) Segment type.

6(6) Type of plan involved, such as for profit or not for profit.

7(7) Whether the products are opened or closed.

8(8) Enrollment in each plan contract and rating form.

9(9) Enrollee months in each plan contract form.

10(10) Annual rate.

11(11) Total earned premiums in each plan contract form.

12(12) Total incurred claims in each plan contract form.

13(13) Average rate increase initially requested.

14(14) Review category: initial filing for new product, filing for
15existing product, or resubmission.

16(15) Average rate of increase.

17(16) Effective date of rate increase.

18(17) Number of subscribers or enrollees affected by each plan
19contract form.

20(18) The plan’s overall annual medical trend factor assumptions
21in each rate filing for all benefits and by aggregate benefit category,
22including hospital inpatient, hospital outpatient, physician services,
23prescription drugs and other ancillary services, laboratory, and
24radiology. A plan may provide aggregated additional data that
25demonstrates or reasonably estimates year-to-year cost increases
26in specific benefit categories in major geographic regions of the
27state. For purposes of this paragraph, “major geographic region”
28shall be defined by the department and shall include no more than
29nine regions. A health plan that exclusively contracts with no more
30than two medical groups in the state to provide or arrange for
31professional medical services for the enrollees of the plan shall
32instead disclose the amount of its actual trend experience for the
33prior contract year by aggregate benefit category, using service
34categories that are, to the maximum extent possible, the same or
35similar to the benefit categories used by other plans. For this
36purpose, benefit categories shall be those specified in subdivision
37(e) of Section 1385.04.

38(19) The amount of the projected trend attributable to the use
39of services, price inflation, or fees and risk for annual plan contract
40trends by aggregate benefit category, such as hospital inpatient,
P5    1hospital outpatient, physician services, prescription drugs and other
2ancillary services, laboratory, and radiology. A health plan that
3exclusively contracts with no more than two medical groups in the
4state to provide or arrange for professional medical services for
5the enrollees of the plan shall instead disclose the amount of its
6actual trend experience for the prior contract year by aggregate
7service category, using service categories that are, to the maximum
8extent possible, the same or similar to those used by other plans.
9For this purpose, benefit categories shall be those specified in
10subdivision (e) of Section 1385.04.

11(20) A comparison of claims cost and rate of changes over time.

12(21) Any changes in enrollee cost-sharing over the prior year
13associated with the submitted rate filing.

14(22) Any changes in enrollee benefits over the prior year
15associated with the submitted rate filing.

16(23) The certification described in subdivision (b) of Section
171385.06.

18(24) Any changes in administrative costs.

19(25) Any other information required for rate review under
20PPACA.

21(c) A health care service plan subject to subdivision (a) shall
22also disclose the following aggregate data for all rate filings
23submitted under this section in the individual and small group
24health plan markets:

25(1) Number and percentage of rate filings reviewed by the
26following:

27(A) Plan year.

28(B) Segment type.

29(C) Product type.

30(D) Number of subscribers.

31(E) Number of covered lives affected.

32(2) The plan’s average rate increase by the following categories:

33(A) Plan year.

34(B) Segment type.

35(C) Product type.

36(3) Any cost containment and quality improvement efforts since
37the plan’s last rate filing for the same category of health benefit
38plan. To the extent possible, the plan shall describe any significant
39new health care cost containment and quality improvement efforts
P6    1and provide an estimate of potential savings together with an
2estimated cost or savings for the projection period.

3(d) The department may require all health care service plans to
4submit all rate filings to the National Association of Insurance
5Commissioners’ System for Electronic Rate and Form Filing
6(SERFF). Submission of the required rate filings to SERFF shall
7be deemed to be filing with the department for purposes of
8compliance with this section.

9(e) A plan shall submit any other information required under
10PPACA. A plan shall also submit any other information required
11pursuant to any regulation adopted by the department to comply
12with this article.

13

begin deleteSEC. 2.end delete
14begin insertSEC. 3.end insert  

Section 1385.04 of the Health and Safety Code is
15amended to read:

16

1385.04.  

(a) For large group health care service plan contracts,
17all health plans shall file with the department at least 60 days prior
18to implementing any rate change all required rate information for
19rate increases that exceed 5 percent of the prior year’s rate. This
20filing shall be concurrent with the written notice described in
21subdivision (a) of Section 1374.21.

22(b) For large group rate filings, health plans shall submit all
23information that is required by PPACA. A plan shall also submit
24any other information required pursuant to any regulation adopted
25by the department to comply with this article.

begin delete

26(c) A health care service plan subject to subdivision (a) shall
27also annually disclose the following aggregate data for all rate
28filings submitted under this section:

29(1) Number and percentage of rate filings reviewed by the
30following:

31(A) Plan year.

32(B) Segment type.

33(C) Product type.

34(D) Number of subscribers.

35(E) Number of covered lives affected.

36(2) The plan’s average rate increase by the following categories:

37(A) Plan year.

38(B) Segment type.

39(C) Product type.

40(D) Benefit category.

P7    1(E) Number of covered lives affected.

2(3) Any cost containment and quality improvement efforts since
3the plan’s last rate filing for the same category of health benefit
4plan. To the extent possible, the plan shall describe any significant
5new health care cost containment and quality improvement efforts
6and provide an estimate of potential savings together with an
7estimated cost or savings for the projection period, including an
8estimate of any reduction in the rate within the next five years of
9implementation of those efforts.

end delete
begin insert

10(c) A health care service plan subject to subdivision (a) shall
11disclose for each rate filing that exceeds 5 percent of the prior
12year’s rate for that group all of the following:

end insert
begin insert

13(1) Company name and contact information.

end insert
begin insert

14(2) Number of plan contract forms covered by the filing.

end insert
begin insert

15(3) Plan contract form numbers covered by the filing.

end insert
begin insert

16(4) Product type, such as a preferred provider organization or
17health maintenance organization.

end insert
begin insert

18(5) Segment type.

end insert
begin insert

19(6) Type of plan involved, such as for profit or not for profit.

end insert
begin insert

20(7) Whether the products are opened or closed.

end insert
begin insert

21(8) Enrollment in each plan contract and rating form.

end insert
begin insert

22(9) Enrollee months in each plan contract form.

end insert
begin insert

23(10) Annual rate.

end insert
begin insert

24(11) Total earned premiums in each plan contract form.

end insert
begin insert

25(12) Total incurred claims in each plan contract form.

end insert
begin insert

26(13) Average rate increase initially requested.

end insert
begin insert

27(14) Review category: initial filing for new product, filing for
28existing product, or resubmission.

end insert
begin insert

29(15) Average rate of increase.

end insert
begin insert

30(16) Effective date of rate increase.

end insert
begin insert

31(17) Number of subscribers or enrollees affected by each plan
32contract form.

end insert
begin insert

33(18) The plan’s overall annual medical trend factor assumptions
34in each rate filing for all benefits and by aggregate benefit
35category, including hospital inpatient, hospital outpatient,
36physician services, prescription drugs and other ancillary services,
37laboratory, and radiology. A plan may provide aggregated
38additional data that demonstrates or reasonably estimates
39year-to-year cost increases in specific benefit categories in major
40geographic regions of the state. For purposes of this paragraph,
P8    1“major geographic region” shall be defined by the department
2and shall include no more than nine regions. A health plan that
3exclusively contracts with no more than two medical groups in the
4state to provide or arrange for professional medical services for
5the enrollees of the plan shall instead disclose the amount of its
6actual trend experience for the prior contract year by aggregate
7benefit category, using service categories that are, to the maximum
8extent possible, the same or similar to the benefit categories used
9by other plans. For this purpose, benefit categories shall be those
10specified in subdivision (e).

end insert
begin insert

11(19) The amount of the projected trend attributable to the use
12of services, price inflation, or fees and risk for annual plan contract
13trends by aggregate benefit category, such as hospital inpatient,
14hospital outpatient, physician services, prescription drugs and
15other ancillary services, laboratory, and radiology. A health plan
16that exclusively contracts with no more than two medical groups
17in the state to provide or arrange for professional medical services
18for the enrollees of the plan shall instead disclose the amount of
19its actual trend experience for the prior contract year by aggregate
20service category, using service categories that are, to the maximum
21extent possible, the same or similar to those used by other plans.
22For this purpose, benefit categories shall be those specified in
23subdivision (e).

end insert
begin insert

24(20) A comparison of claims cost and rate of changes over time.

end insert
begin insert

25(21) Any changes in enrollee cost-sharing over the prior year
26associated with the submitted rate filing.

end insert
begin insert

27(22) Any changes in enrollee benefits over the prior year
28associated with the submitted rate filing.

end insert
begin insert

29(23) The certification described in subdivision (b) of Section
301385.06.

end insert
begin insert

31(24) Any changes in administrative costs.

end insert
begin insert

32(25) Any other information required for rate review under
33PPACA.

end insert

34(d) Except as provided in subdivision (e), a health care service
35plan shall annually disclose the following aggregate data for all
36products sold in the large group market:

37(1) Plan year.

38(2) Segment type.

39(3) Product type.

40(4) Number of subscribers.

P9    1(5) Number of covered lives affected.

2(6) The plan’s average rate increase by the following:

3(A) Plan year.

4(B) Segment type.

5(C) Product type.

6(D) Benefit category, including, but not limited to, hospital,
7medical, ancillary, and other benefit categories reported publicly
8for individual and small employer rate filings.

9(E) Trend attributable to cost and trend attributable to utilization
10 by benefit category.

11(e) A health care service plan that is unable to provide
12information on rate increases by benefit categoriesbegin insert, as defined in
13subdivision (d) of Section 1385.07end insert
, including, but not limited to,
14hospital, outpatient medical, and mental health, or information on
15trend attributable to cost and trend attributable to utilization by
16benefit category pursuant to subdivision (d), shall annually disclose
17all of the following aggregate data for its large group health care
18service plan contracts:

19(1) (A) The plan’s overall aggregate data demonstrating or
20reasonably estimating year-to-year cost increases in the aggregate
21for large group rates by major service category. The plan shall
22distinguish between the increase ascribed to the volume of services
23provided and the increase ascribed to the cost of services provided
24for those assumptions that shall include the following categories:

25(i) Hospital inpatient.

26(ii) Outpatient visits.

27(iii) Outpatient surgical or other procedures.

28(iv) Professional medical.

29(v) Mental health.

30(vi) Substance abuse.

31(vii) Skilled nursing facility, if covered.

32(viii) Prescription drugs.

33(ix) Other ancillary services.

34(x) Laboratory.

35(xi) Radiology or imaging.

36(B) A plan may provide aggregated additional data that
37demonstrate or reasonably estimate year-to-year cost increases in
38each of the specific service categories specified in subparagraph
39(A) for each of the major geographic regions of the state.

P10   1(2) The amount of projected trend attributable to the following
2categories:

3(A) Use of services by service and disease category.

4(B) Capital investment.

5(C) Community benefit expenditures, excluding bad debt and
6valued at cost.

7(3) The amount and proportion of costs attributed to contracting
8medical groups that would not have been attributable as medical
9losses if incurred by the health plan rather than the medical group.

10(f) (1) A health care service plan shall annually provide claims
11data at no charge to a large group purchaser if the large group
12purchaser requests the information. The health care service plan
13shall provide claims data that a qualified statistician has determined
14are deidentified so that the claims data do not identify or do not
15provide a reasonable basis from which to identify an individual.

16(2) Information provided to a large group purchaser under this
17subdivision is not subject to Section 1385.07.

18(3) (A) If claims data are not available, the plan shall provide,
19at no charge to the purchaser, all of the following:

20(i) Deidentified data sufficient for the large group purchaser to
21calculate the cost of obtaining similar services from other health
22plans and evaluate cost-effectiveness by service and disease
23category.

24(ii) Deidentified patient-level data on demographics, prescribing,
25encounters, inpatient services, outpatient services, and any other
26data as may be required of the health plan to comply with risk
27adjustment, reinsurance, or risk corridors pursuant to the federal
28Patient Protection and Affordable Care Act (Public Law 111-148),
29as amended by the federal Health Care and Education
30Reconciliation Act of 2010 (Public Law 111-152), and any rules,
31regulations, or guidance issued thereunder.

32(iii) Deidentified patient-level data used to experience rate the
33large group, including diagnostic and procedure coding and costs
34assigned to each service.

35(B) The health care service plan shall obtain a formal
36determination from a qualified statistician that the data provided
37pursuant to this paragraph have been deidentified so that the data
38 do not identify or do not provide a reasonable basis from which
39to identify an individual. The statistician shall certify the formal
P11   1determination in writing and shall, upon request, provide the
2protocol used for deidentification to the department.

3(4) Data provided pursuant to this subdivision shall only be
4provided to a large group purchaser that meets both of the
5following conditions:

6(A) Is able to demonstrate its ability to comply with state and
7federal privacy laws.

8(B) Is a large group purchaser that is either an
9begin delete employer-sponsored planend deletebegin insert employerend insert with an enrollment of greater
10than 1,000 covered lives or a multiemployer trust.

11(g) The department may require all health care service plans to
12submit all rate filings to the National Association of Insurance
13Commissioners’ System for Electronic Rate and Form Filing
14(SERFF). Submission of the required rate filings to SERFF shall
15be deemed to be filing with the department for purposes of
16compliance with this section.

17begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 791.27 of the end insertbegin insertInsurance Codeend insertbegin insert is amended to
18read:end insert

19

791.27.  

begin insert(a)end insertbegin insertend insertA disability insurer that provides coverage for
20hospital, medical, or surgical expenses shall not release any
21information to an employer that would directly or indirectly
22indicate to the employer that an employee is receiving or has
23received services from a health care provider covered by the plan
24unless authorized to do so by the employee. An insurer that has,
25pursuant to an agreement, assumed the responsibility to pay
26compensation pursuant to Article 3 (commencing with Section
273750) of Chapter 4 of Part 1 of Division 4 of the Labor Code, shall
28not be considered an employer for the purposes of this section.
29begin delete Nothingend delete

30begin insert(b)end insertbegin insertend insertbegin insertNothingend insert in this section prohibits a disability insurer from
31releasing relevant information described in this section for the
32purposes set forth in Chapter 12 (commencing with Section 1871)
33of Part 2 of Division 1.

begin insert

34(c)  Nothing in this section prohibits a health insurer from
35releasing relevant information described in this section for the
36purposes set forth in Article 4.5 (commencing with Section 10181)
37of Chapter 1 of Part 2 of Division 2.

end insert
38

begin deleteSEC. 3.end delete
39begin insertSEC. 5.end insert  

Section 10181.4 of the Insurance Code is amended to
40read:

P12   1

10181.4.  

(a) For large group health insurance policies, all
2health insurers shall file with the department at least 60 days prior
3to implementing any rate change all required rate information for
4rate increases that exceed 5 percent of the prior year’s rate. This
5filing shall be concurrent with the written notice described in
6Section 10199.1.

7(b) For large group rate filings, health insurers shall submit all
8information that is required by PPACA. A health insurer shall also
9submit any other information required pursuant to any regulation
10adopted by the department to comply with this article.

begin delete

11(c) A health insurer subject to subdivision (a) shall also annually
12disclose the following aggregate data for all rate filings submitted
13under this section:

end delete
begin delete

14(1) Number and percentage of rate filings reviewed by the
15following:

end delete
begin delete

16(A) Policy year.

end delete
begin delete

17(B) Segment type.

end delete
begin delete

18(C) Product type.

end delete
begin delete

19(D) Number of insureds.

end delete
begin delete

20(E) Number of covered lives affected.

end delete
begin delete

21(2) The insurer’s average rate increase by the following
22categories:

end delete
begin delete

23(A) Policy year.

end delete
begin delete

24(B) Segment type.

end delete
begin delete

25(C) Product type.

end delete
begin delete

26(D) Benefit category.

end delete
begin delete

27(E) Number of covered lives affected.

end delete
begin delete

28(3) Any cost containment and quality improvement efforts since
29the health insurer’s last rate filing for the same category of health
30insurance policy. To the extent possible, the health insurer shall
31describe any significant new health care cost containment and
32quality improvement efforts and provide an estimate of potential
33savings together with an estimated cost or savings for the projection
34period, including an estimate of any reduction in the rate within
35the next five years of implementation of those efforts.

end delete
begin insert

36(c) A health insurer subject to subdivision (a) shall disclose for
37each rate filing that exceeds 5 percent of the prior year’s rate for
38that group all of the following:

end insert
begin insert

39(1) Company name and contact information.

end insert
begin insert

40(2) Number of policy forms covered by the filing.

end insert
begin insert

P13   1(3) Policy form numbers covered by the filing.

end insert
begin insert

2(4) Product type, such as indemnity or preferred provider
3organization.

end insert
begin insert

4(5) Segment type.

end insert
begin insert

5(6) Type of insurer involved, such as for profit or not for profit.

end insert
begin insert

6(7) Whether the products are opened or closed.

end insert
begin insert

7(8) Enrollment in each policy and rating form.

end insert
begin insert

8(9) Insured months in each policy form.

end insert
begin insert

9(10) Annual rate.

end insert
begin insert

10(11) Total earned premiums in each policy form.

end insert
begin insert

11(12) Total incurred claims in each policy form.

end insert
begin insert

12(13) Average rate increase initially requested.

end insert
begin insert

13(14) Review category: initial filing for new product, filing for
14existing product, or resubmission.

end insert
begin insert

15(15) Average rate of increase.

end insert
begin insert

16(16) Effective date of rate increase.

end insert
begin insert

17(17) Number of policyholders or insureds affected by each policy
18form.

end insert
begin insert

19(18) The insurer’s overall annual medical trend factor
20assumptions in each rate filing for all benefits and by aggregate
21benefit category, including hospital inpatient, hospital outpatient,
22physician services, prescription drugs and other ancillary services,
23laboratory, and radiology. An insurer may provide aggregated
24additional data that demonstrates or reasonably estimates
25year-to-year cost increases in specific benefit categories in major
26geographic regions of the state. For purposes of this paragraph,
27“major geographic region” shall be defined by the department
28and shall include no more than nine regions.

end insert
begin insert

29(19) The amount of the projected trend attributable to the use
30of services, price inflation, or fees and risk for annual policy trends
31by aggregate benefit category, such as hospital inpatient, hospital
32outpatient, physician services, prescription drugs and other
33ancillary services, laboratory, and radiology.

end insert
begin insert

34(20) A comparison of claims cost and rate of changes over time.

end insert
begin insert

35(21) Any changes in insured cost-sharing over the prior year
36associated with the submitted rate filing.

end insert
begin insert

37(22) Any changes in insured benefits over the prior year
38associated with the submitted rate filing.

end insert
begin insert

39(23) The certification described in subdivision (b) of Section
4010181.6.

end insert
begin insert

P14   1(24) Any changes in administrative costs.

end insert
begin insert

2(25) Any other information required for rate review under
3PPACA.

end insert

4(d) Except as provided in subdivision (e), a health insurer shall
5annually disclose the following aggregate data for all products
6sold in the large group market:

7(1) Policy year.

8(2) Segment type.

9(3) Product type.

10(4) Number of policyholders.

11(5) Number of covered lives affected.

12(6) The insurer’s average rate increase by the following:

13(A) Policy year.

14(B) Segment type.

15(C) Product type.

16(D) Benefit category, including, but not limited to, hospital,
17medical, ancillary, and other benefit categories reported publicly
18for individual and small employer rate filings.

19(E) Trend attributable to cost and trend attributable to utilization
20by benefit category.

21(e) A health insurer that is unable to provide information on
22rate increases by benefit categories,begin insert as defined in subdivision (d)
23of Section 10181.7end insert
including, but not limited to, hospital, outpatient
24medical, and mental health, or information on trend attributable
25to cost and trend attributable to utilization by benefit category
26pursuant to subdivision (d), shall annually disclose all of the
27following aggregate data for its large group health insurance
28policies:

29(1) (A) The insurer’s overall aggregate data demonstrating or
30reasonably estimating year-to-year cost increases in the aggregate
31for large group rates by major service category. The insurer shall
32distinguish between the increase ascribed to the volume of services
33provided and the increase ascribed to the cost of services provided
34for those assumptions that shall include the following categories:

35(i) Hospital inpatient.

36(ii) Outpatient visits.

37(iii) Outpatient surgical or other procedures.

38(iv) Professional medical.

39(v) Mental health.

40(vi) Substance abuse.

P15   1(vii) Skilled nursing facility, if covered.

2(viii) Prescription drugs.

3(ix) Other ancillary services.

4(x) Laboratory.

5(xi) Radiology or imaging.

6(B) An insurer may provide aggregated additional data that
7demonstrate or reasonably estimate year-to-year cost increases in
8each of the specific service categories specified in subparagraph
9(A) for each of the major geographic regions of the state.

10(2) The amount of projected trend attributable to the following
11categories:

12(A) Use of services by service and disease category.

13(B) Capital investment.

14(C) Community benefit expenditures, excluding bad debt and
15valued at cost.

16(3) The amount and proportion of costs attributed to contracting
17medical groups that would not have been attributable as medical
18losses if incurred by the health insurer rather than the medical
19group.

20(f) (1) A health insurer shall annually provide claims data at
21no charge to a large group purchaser if the large group purchaser
22requests the information. The health insurer shall provide claims
23data that a qualified statistician has determined are deidentified so
24that the claims data do not identify or do not provide a reasonable
25basis from which to identify an individual.

26(2) Information provided to a large group purchaser under this
27subdivision is not subject to Section 10181.7.

28(3) (A) If claims data are not available, the insurer shall provide,
29at no charge to the purchaser, all of the following:

30(i) Deidentified data sufficient for the large group purchaser to
31calculate the cost of obtaining similar services from other health
32insurers and plans and evaluate cost-effectiveness by service and
33disease category.

34(ii) Deidentified patient-level data on demographics, prescribing,
35encounters, inpatient services, outpatient services, and any other
36data as may be required of the health insurer to comply with risk
37adjustment, reinsurance, or risk corridors pursuant to the federal
38Patient Protection and Affordable Care Act (Public Law 111-148),
39as amended by the federal Health Care and Education
P16   1Reconciliation Act of 2010 (Public Law 111-152), and any rules,
2regulations, or guidance issued thereunder.

3(iii) Deidentified patient-level data used to experience rate the
4large group, including diagnostic and procedure coding and costs
5assigned to each service.

6(B) The health insurer shall obtain a formal determination from
7a qualified statistician that the data provided pursuant to this
8paragraph have been deidentified so that the data do not identify
9or do not provide a reasonable basis from which to identify an
10individual. The statistician shall certify the formal determination
11in writing and shall, upon request, provide the protocol used for
12deidentification to the department.

13(4) Data provided pursuant to this subdivision shall only be
14provided to a large group purchaser that meets both of the
15following conditions:

16(A) Is able to demonstrate its ability to comply with state and
17federal privacy laws.

18(B) Is a large group purchaser that is either an
19begin delete employer-sponsored planend deletebegin insert employerend insert with an enrollment of greater
20than 1,000 covered lives or a multiemployer trust.

21(g) The department may require all health insurers to submit all
22rate filings to the National Association of Insurance
23Commissioners’ System for Electronic Rate and Form Filing
24 (SERFF). Submission of the required rate filings to SERFF shall
25be deemed to be filing with the department for purposes of
26compliance with this section.

27

begin deleteSEC. 4.end delete
28begin insertSEC. 6.end insert  

No reimbursement is required by this act pursuant to
29Section 6 of Article XIII B of the California Constitution because
30the only costs that may be incurred by a local agency or school
31district will be incurred because this act creates a new crime or
32infraction, eliminates a crime or infraction, or changes the penalty
33for a crime or infraction, within the meaning of Section 17556 of
34the Government Code, or changes the definition of a crime within
35the meaning of Section 6 of Article XIII B of the California
36Constitution.



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