BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:  August 3, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          SB 1034  
          (Mitchell) - As Amended August 1, 2016


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          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:






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          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.  






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          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. 








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            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.









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          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  






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            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.  
                 







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               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  






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            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







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