BILL ANALYSIS Ó
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Date of Hearing: July 14, 2015
ASSEMBLY COMMITTEE ON HEALTH
Rob Bonta, Chair
HR 26
(Low) - As Introduced June 24, 2015
SUBJECT: Department of Managed Health Care.
SUMMARY: Commends the Department of Managed Health Care (DMHC)
on 15 years of operation. Specifically, this resolution:
1)Commends the DMHC for 15 years of operation on behalf of
California's patients.
2)Encourages all Californians to learn about their legal right
to timely access to high quality health care.
3)Authorizes the Chief Clerk of the Assembly transmit copies of
this resolution to the author for appropriate distribution.
EXISTING LAW:
1)Establishes the DMHC, effective January 1, 2000, to protect
consumer health care rights and ensure a stable health care
delivery system.
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2)Establishes the Knox-Keene Health Care Service Plan Act of
1975 (Knox-Keene Act), the body of law governing health care
service plans which provides for the licensure and regulation
plans by DMHC.
FISCAL EFFECT: None
COMMENTS:
1)PURPOSE OF THIS RESOLUTION. According to the author, this
resolution is an important recognition of DMHC and its 15
years of operation on behalf of California's patients. DMHC
has provided invaluable service to the people of California in
protecting patients' rights and navigating the changing health
care landscape. The author notes the importance for all
Californians to learn about their legal rights to timely
access to high quality health care and to appreciate DMHC's
continued commitment to this issue.
2)BACKGROUND. DMHC licenses and regulates health maintenance
organizations and some preferred provider organizations. As
an organization designed for consumer protection, the mission
of DMHC is to regulate and provide quality of care and fiscal
oversight of plans. DMHC achieves this mission, in part, by
administering and enforcing the Knox-Keene Act.
DMHC performs medical surveys of all of the Medi-Cal Managed
Care plans with a Knox-Keene Act license every three years,
also evaluating the plans' compliance with Knox-Keene Act
licensure requirements, including quality of care, and overall
performance in providing health care benefits and meeting the
health care needs of enrollees. In its audits, DMHC reviews
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numerous aspects of plan operation and performance, including
plan utilization management, access and availability of
services, quality management, grievances and appeals, case
management and coordination of care, access to emergency
services and payment, and prescription drug benefits and
authorization process.
DMHC monitors and evaluates the financial viability of health
plans to ensure continued access to health care services for
the enrollees/patients of California. This is accomplished by
reviewing financial statements, analyzing financial
arrangements and other information submitted as part of the
licensing, material modification, and amendment process; and
by performing routine and non-routine examinations.
DMHC reviews proposed health plan premium rate increases,
analyzes the justification for such increases, educates the
public to expand consumer understanding of how premium rates
are established and promotes more accountability within the
health care industry. It also monitors the financial
stability of Risk Bearing Organizations through the analyses
of financial data and corrective action plans. DMHC
investigates and provides meaningful and appropriate
regulatory resolutions to claim payment disputes through
identifying unfair payment practices and unfair billing
patterns.
In order to provide direct consumer assistance, DMHC also
operates the Help Center, which provides information to
consumers enrolled in Knox-Keene Act licensed plans, and
assists them in resolving complaints, including complaints
involving plan denials of services based on medical necessity
or coverage decisions.
According to a 2001 report by the California HealthCare
Foundation, entitled "Making Sense of Managed Care Regulation
in California," as providers, consumers, and consumer
advocates witnessed dramatic changes in health care delivery
precipitated by growth in managed care throughout the 1980's,
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they increasingly sought legislative and regulatory changes in
how managed care plans operated and were regulated.
In 1999, the Legislature passed a series of managed care
reforms, including AB 78 (Gallegos), Chapter 525, Statutes of
1999, which created DMHC. Additionally, a number of other
bills referred to by consumer advocates as the "Patient Bill
of Rights," were enacted that same year, and included
protections such as guaranteed coverage for second opinions;
time limits on utilization review and mandated disclosure of
criteria health plans use in denying coverage; independent
medical review to resolve disputes related to denials, delays,
or modifications of coverage; and, standards to assure the
plan solvency.
Over the years, the Knox-Keene Act has been amended to include
additional consumer protections, including requirements
relating to timely access and provider networks.
Additionally, the recent passage of the Patient Protection and
Affordable Care Act (ACA) enacted numerous insurance market
reforms for health plans to meet and for DMHC to enforce.
3)PREVIOUS LEGISLATION.
a) AB 78 established a new Department of Managed Care (DMC)
and transferred the regulation of health care service plans
from the Department of Corporations to DMC.
b) AB 138 (Knox), Chapter 941, Statutes of 1975, created
the Knox-Keene Act which transferred regulation of health
care service plans from the Attorney General to the
Commissioner of the Department of Corporations. Enacted
standards related to basic health care services,
administrative and financial systems, marketing and
advertising, forms for plan contracts issued, among other
things.
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REGISTERED SUPPORT / OPPOSITION:
Support
None on file.
Opposition
None on file.
Analysis Prepared by:Rylan Gervase / HEALTH / (916) 319-2097
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