BILL ANALYSIS Ó SB 1034 Page 1 Date of Hearing: August 3, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair SB 1034 (Mitchell) - As Amended August 1, 2016 ----------------------------------------------------------------- |Policy |Health |Vote:|13 - 1 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: YesReimbursable: No SUMMARY: This bill extends and broadens an existing mandate that requires health plans and insurers to cover medically necessary behavioral health treatment services, including applied behavioral analysis (ABA) for pervasive developmental disorder or autism (autism). Specifically, this bill: SB 1034 Page 2 1)Revises the definition of BHT to require coverage of other evidence-based behavior intervention programs and programs that maintain the functioning of an individual with autism, as specified. 2)Deletes requirements that qualified autism service (QAS) professionals and paraprofessionals be employed by QAS providers. 3)Prohibits lack of parent or caregiver participation from being used to deny or reduce medically necessary BHT. 4)Prohibits health plans or health insurers from denying medically necessary BHT on the basis of setting, location, or time of treatment. 5)Provides that notwithstanding (3) and (4), all services shall remain covered only to the extent that the services are medical necessary and are subject to utilization review, as described. 6)Deletes exemptions from the law for health plans that participate in the Healthy Families Program (which no longer exists) and CalPERS. 7)Extends the sunset on the mandate to January 1, 2022. 8)Prohibits construing this bill from requiring coverage for services that are included in a patient's individualized education program (IEP; a plan that describes a child's special education needs and services) or delivered by school personnel. SB 1034 Page 3 9)Continues the exemption of Medi-Cal from the mandate requirements. FISCAL EFFECT: 1)According to the California Health Benefits Review Program (CHBRP): a) Annual premium costs to CalPERS of about $290,000 per year (GF/ special/ federal/ local). Cost savings are split approximately 50-50 between state and local government. b) Annual employer-funded premium costs in the private insurance market of approximately $4 million. c) Increased premium expenditures by employees and individuals purchasing insurance of $3.4 million, and increased total out-of-pocket expenses of $0.5 million. 2)CHBRP notes several other provisions may increase utilization of services and commensurate costs, including the prohibition against denials of parent/caregiver involvement, the elimination of restrictions on settings (as public schools could now be covered settings), and utilization of maintenance behavioral health treatment among older individuals who are not currently receiving BHT services. However, CHBRP was unable to quantify these increases. SB 1034 Page 4 Given CHBRP identified only 6,000 individuals who are receiving BHT services, out of a total of 36,000 diagnosed with autism with coverage that is affected by this mandate, utilization of coverage for maintenance therapy among individuals who may have had some prior treatment but are currently not using services could be quite significant (i.e., a portion of those 30,000 people may begin to use coverage). In addition, if schools are now covered settings whereas school-based services were previously being denied due to setting or timing of services during the school day, it stands to reason a larger number of hours may be paid for by plans, because there are simply a limited number of hours available outside of school. Rejection of treatment during the school day or in a school setting may constrain utilization, and this would no longer be the case. Any significant increased costs associated with these "unquantifiable" provisions would affect CalPERS premiums and the state as a payer, as well commercial plans. 3)No increased costs for the Medi-Cal program are anticipated due to this bill. Current law exempts Medi-Cal managed care plans from the existing benefit mandate, and this bill continues to exempt Medi-Cal. (However, federal guidance requires coverage for BHT for Medi-Cal enrollees with autism or related disorders. The state has just begun providing this benefit in Medi-Cal and is in the process of transitioning Medi-Cal enrollee previously served by regional centers to having coverage provided by Medi-Cal.) 4)Minor costs, under $50,000, to the California Department of Insurance (Insurance Fund) and minor and absorbable costs to the Department of Managed Health Care (Managed Care Fund) to verify plans and insurers comply with this requirement. SB 1034 Page 5 5)Since the bill does not require plans to pay for services that are included in an IEP, it is unclear whether this bill will lead to plan-covered services displacing services that would otherwise be funded by the public school system. To the extent this occurs, however, there could be reduced Proposition 98/GF cost pressure for special education services. COMMENTS: 1)Purpose. According to the author, this bill would ensure that children diagnosed with autism continue to have access to medically necessary treatments to increase their quality of life and functional independence by extending the sunset on the BHT mandate and increasing access by changing provisions that describe the terms of coverage. 2)Background. The state's BHT mandate (SB 946 (Steinberg), Chapter 650, Statutes of 2011), imposes a set of rules regarding BHT that health plans and health insurers in California must cover for individuals with autism. SB 946 also identifies the required qualifications of individuals who provide BHT, and permits individuals who are not licensed by the state to provide BHT, as long as the detailed criteria set forth in the bill are met. Before and since the time SB 946 was signed, BHT has also found to be required under different provisions of law, namely under regulatory interpretation of federal mental health parity laws for commercial plans, and under federal Centers for Medicare and Medicaid Services (CMS) guidance for Medi-Cal. 3)IEPs. Pursuant to the federal Individuals with Disabilities Education Act (IDEA), children with disabilities are guaranteed the right to a free, appropriate public education (FAPE), including necessary services for a child to benefit from his or her education. An IEP is a legally binding SB 1034 Page 6 document that determines what special education services a child will receive and why. IEPs include a child's classification, placement, specialized services, academic and behavioral goals, a behavior plan if needed, percentage of time in regular education, and progress reports from teachers and therapists. A child may require any related services in order to benefit from special education, including, but not limited to: speech-language pathology and audiology services, early identification and assessment of disabilities in children, medical services, physical and occupational therapy, and behavioral health services. Pursuant to federal regulation (34 CFR §300.154), schools are allowed to seek insurance coverage for services required for a child to benefit from a FAPE, as long as they have parent consent. Schools must still provide special education services regardless of parental consent to use their private insurance. Schools can also use special education funds to pay copayments for health insurance. 4)Support. Advocates for children and autistic children, autism providers, the National Health Law Program, and the California School Employees Association, AFL-CIO support this bill, stating it will ensure children are not denied medically necessary services. 5)Opposition. Health plans and insurers are opposed raise a number of concerns, including the following: a) Cost-shifting to the plans for services that may have otherwise have been provided by schools. They see the prohibition on denying services based on time, location, or setting as requiring plans to pay for significantly more school-based services, likely as a result of increased utilization as well as cost-shifting. SB 1034 Page 7 b) A lack of geographical boundaries with respect to provisions prohibiting denial based on the setting or location of treatment. Plans see this as an open-ended requirement to cover treatment at any time or location. c) Concern that the combination of mandating coverage for therapy that seeks to maintain functioning and the prohibition on denial of services due to lack of parent participation will mean therapists paid for by plans will displace support provided by parents, who are critical partners in ensuring effective treatment according to medical literature. d) The exemption of Medi-Cal creates dual standards and may not stand up to legal or public scrutiny. e) According to federal student privacy law, plans are not legally allowed to access IEPs, so they have no way to verify whether services should be covered or may be denied based upon their inclusion in an IEP or provision by the school district. f) Provisions requiring coverage for maintenance services and prohibiting denial based on lack of parental participation runs afoul of accepted best practices and is unsupported by medical literature or peer review. 6)Prior Legislation. SB 126 (Steinberg), Chapter 680, Statutes of 2013, extends, until January 1, 2017, the sunset date of the BHT mandate. 7)Related Legislation. AB 796 (Nazarian) requires the Department of Developmental Services to develop a methodology for determining what constitutes an evidence-based practice in the SB 1034 Page 8 field of BHT for autism and pervasive developmental disorder and to update regulations to set forth the minimum standards of education, training, and professional experience for QAS professionals and paraprofessionals, as specified. AB 796 is pending in the Senate Appropriations Committee. 8)Staff Comments. By exempting Medi-Cal, the bill sets up conflicting standards for the provision and denial of care between Medi-Cal and the commercial market, which raises the question of why the bill's protections, which according to proponents are important to ensure those children in commercial plans receive adequate treatment, are not granted to children on Medi-Cal. A technical issue that appears unresolved is that the bill exempts plans from covering services that are in an IEP - but how will a plan know whether services are in an IEP for purposes of this bill? More broadly, in the case of autism, a brain disorder that impedes social development, there is often no clean line between social and developmental services that may be necessary to benefit from a FAPE, and "medically necessary" behavioral health treatment services. According to health plans, the denial of coverage for health services provided at a school setting during the school day may have maintained a line between school-based special education services and health care services, which this bill seeks to blur or eliminate for purposes of autism treatment. Without comment on the desirability of removing this distinction, it does appear to merit additional discussion of who should be the primary payer for needed services for which there is a dual coverage mandate. Analysis Prepared by:Lisa Murawski / APPR. / (916) 319-2081 SB 1034 Page 9