BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 289 (Mitchell) - Telephonic and electronic patient management
services
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|Version: May 4, 2015 |Policy Vote: HEALTH 6 - 0 |
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|Urgency: No |Mandate: Yes |
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|Hearing Date: May 18, 2015 |Consultant: Brendan McCarthy |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 289 would mandate that health insurers and health
plans provide coverage for telephonic and electronic patient
management services provided by a contracted physician or
non-physician health care provider.
Fiscal
Impact:
Increased health-care cost to CalPERS between $650,000 and
$2.9 million per year due to overall increased utilization of
health care services (General fund and special funds). (See
below for more detail.)
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No anticipated increase in health care costs to the Medi-Cal
program (General Fund and federal funds). The California
Health Benefits Review Program indicates that the requirement
for health plans to pay for telephonic and electronic patient
management services would apply to Medi-Cal managed care
plans. However, Program staff indicate that they do not
believe that Medi-Cal managed care plans would be able to pass
those costs along to the state, given the state's considerable
bargaining power in contract negotiations. Rather, Medi-Cal
managed care plans are likely to either absorb the costs of
the bill or include provisions in their contracts with
providers that bundle telephonic and electronic patient
management services with other covered services.
Additional costs of $60,000 in 2016-17 and $20,000 per year
thereafter for review of plan filings and responding to
complaints by the Department of Insurance (Insurance Fund).
Additional costs of $150,000 in 2016-17, $80,000 in 2017-18,
and $41,000 per year thereafter to develop regulations, review
plan filings, respond to complaints, and take enforcement
actions by the Department of Managed Health Care (Managed Care
Fund).
Background: Under current law, health insurers are regulated by the
Department of Insurance and health plans are regulated by the
Department of Managed Health Care.
Under current law, health insurers and health plans are
prohibited from requiring an in-person visit between an enrollee
and an health care provider before paying for services that are
appropriately provided through telehealth. Similarly, current
law prohibits health insurers or health plans from limiting the
setting where services are provided through telehealth.
Alternatively, current law prohibits health insurers and health
plans from requiring the use of telehealth when a health care
provider determines that telehealth is not appropriate.
Under current law, individuals purchasing coverage provided
through health benefit exchanges (including Covered California)
are eligible to receive federal subsidies based on household
income. Federal law and regulation requires a state to bear the
proportionate share of the cost to provide subsides for any
SB 289 (Mitchell) Page 2 of
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additional benefit mandates the state imposes on qualifying
health plans sold through an exchange, if the benefit mandate
goes beyond the benefits included in the benchmark plan.
(California has selected the 2012 Kaiser Small Group HMO as its
benchmark plan. Any benefit mandates that are covered under that
plan are "grandfathered" in, and do not require state subsidy.)
Proposed Law:
SB 289 would mandate that health insurers and health plans
provide coverage for telephonic and electronic patient
management services provided by a contracted physician or
non-physician health care provider.
Specific provisions of the bill would:
Beginning on January 1, 2017, require a health insurer or
health plan to cover telephonic and electronic patient
management services provided by a contracted physician or
non-physician health care provider;
Prohibit a health insurer or health plan from requiring
telephonic or electronic patient management services when a
health care provider determines it is not appropriate;
Exclude patients in correctional facilities;
Limit the required reimbursement for services when the
telephonic or electronic patient management service is
related to another service or procedure provided to the
patient, when the telephonic or electronic patient
management service leads to a related service or visit, when
the health care provider receives a bundled or capitated
payment, or when the telephonic or electronic patient
management service is not initiated by the patient.
Related
Legislation: AB 1771 (V.M. Perez, 2014) would have required
health insurers and health plans to provide coverage for
telephone visits provided by a contracted physician or
contracted non-physician health care provider. That bill was
held on this committee's Suspense File.
Staff Comments: As is described in the analysis of the bill
provided by the California Health Benefits Review Program, there
is a good deal of uncertainty about how the behavior of patients
and providers will change under the bill. By requiring
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reimbursement to providers for telephonic and electronic patient
management services, the bill is very likely to increase
providers' willingness to use such services with their patients,
increasing utilization. Some of the increased utilization of
telephonic and electronic patient management services will
reduce in person visits with providers. For example, a patient
may find it more convenient to call or email a provider with a
question about an ongoing health issue, rather than making an in
person appointment. In that case, the bill will not reduce
overall utilization of services: it will result in a substitute
visit. On the other hand, the ability to communicate with a
provider on the phone or through electronic means will also
result in supplemental visits (i.e. more utilization than would
occur under current law). For example, a patient with a minor
question or who is experiencing a minor illness that would not
necessarily lead to an in person visit with a provider would be
more likely to make a phone call or use an electronic means to
communicate with a provider. In those cases, the bill will
result in an increase in overall utilization of health care
services.
The California Health Benefits Review Program modelled a variety
of scenarios for utilization. Under all scenarios, there is both
substitution and supplementation of in person visits. In all
scenarios, however, the supplementation results in an overall
increase of utilization of services and therefore an increase of
health care costs. The overall increase in health care costs,
statewide, is projected to be between $47 million per year and
$207 million per year. Those costs are covered by a variety of
public and private payers and includes additional patient costs
due to copayments and coinsurance paid by patients.
Because the bill does not expand essential health benefits, as
defined in the Affordable Care Act and mandated in state law,
the bill is not expected to result in costs to the state to
subsidize health care coverage through Covered California.
The only costs that may be incurred by a local agency under the
bill relate to crimes and infractions. Under the California
Constitution, such costs are not reimbursable by the state.
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