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
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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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