BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1092|
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THIRD READING
Bill No: SB 1092
Author: Sher (D)
Amended: 4/17/01
Vote: 21
SENATE INSURANCE COMMITTEE : 5-0, 4/4/01
AYES: Speier, Escutia, Figueroa, Scott, Soto
SUBJECT : Health care service plans
SOURCE : Western Center on Law and Poverty
DIGEST : This bill defines "grievance" for purposes of
the Knox-Keene Health Care Service Plan Act of 1975.
ANALYSIS : Existing law:
1.Provides for the licensure and regulation of plans by the
State Department of Managed Health Care (DMHC).
2.Requires that each plan establish and maintain a system
approved by DMHC whereby enrollees may submit their
grievances to a plan.
This bill:
1.Defines "grievance" to include any written or oral
expression of dissatisfaction, and shall include any
complaint, dispute, request for reconsideration, or
appeal made by a subscriber or enrollee or by his or her
representative to a plan or to an entity to which a plan
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has delegated authority to resolve grievances on behalf
of the plan.
2.Specifies that expressions of dissatisfaction received
over the telephone that are not coverage disputes,
disputes over health care services involving medical
necessity, or disputes involving experimental or
investigational treatment shall be exempt from the
definition of grievance if they are resolved to the
satisfaction of the enrollee within one business day of
receipt. These expressions of dissatisfaction shall be
defined as "complaints".
3.Declares that any uncertainty as to whether any
expression of dissatisfaction is an inquiry or grievance
shall be resolved by finding that it is a grievance.
4.Provides technical clarification that also allows
"subscribers" to submit grievances to a plan.
5.Requires a plan to maintain a written or electronic log
of all complaints. This log shall contain the date of
the call, the name of the complainant, the member
identification number, the nature of the complaint, the
nature of the resolution, and the identification of the
plan representative who took the call and resolved the
complaint. This complaint log shall be reviewed by the
plan officer responsible for the grievance process.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 4/18/01)
Western Center on Law and Poverty (source)
California Medical Association
Center for Public Interest Law
Children's Advocacy Institute
Consumer's Union
Health Access California
OPPOSITION : (Verified 4/18/01)
Blue Cross of California
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Health Insurance Association of America
California Association of Health Plans
California Benefits Specialists
ARGUMENTS IN SUPPORT : The author states that the purpose
of the bill is to establish a regulatory system that
inspires consumer confidence. The author believes this can
be accomplished through the enactment of a broadly-defined
grievance statute.
The Western Center on Law and Poverty (WCLP) is the sponsor
of the bill and believes that defining "grievance" in a
fashion that is most favorable to consumers is necessary to
comply with the intent of the 1999-00 HMO reform
legislation. WCLP notes that, under the reform
legislation, the responsibility for licensure and
regulation was shifted from the State Department of
Corporations (DOC) to the newly-created DMHC and believes
that the impetus for this change and the subsequent changes
to the grievance process was a desire for increased
oversight of plans and expanded consumer assistance. WCLP
asserts that the increased emphasis on resolving grievances
has led some of the plans to make the argument that
"grievances" should only include certain limited types of
complaints, or to only include communication where the
enrollee requests that the plan take specific action or
change a prior decision. The sponsor notes that some plans
also proposed to limit grievance to communications relating
to benefit coverage, medical necessity determinations,
quality of care, access to care, or quality of service.
WCLP notes that the definition fostered by some plans is
not as broad as the one used by the DOC prior to the HMO
reform legislation. The sponsor hopes to codify DMHC's new
and more expansive definition of grievance.
ARGUMENTS IN OPPOSITION : Blue Cross (BC) opposes the
bill because it believes the proposed definition of
"grievance" is too broad and will lead to more, rather than
less, delays responding to consumer complaints. BC asserts
that current law requires that all plans maintain a DMHC
grievance system that allows enrollees to submit their
grievances to the plan. In addition, plans are required to
notify each enrollee upon enrollment and annually
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thereafter about how to access the grievance system.
Finally, DMHC has approved grievance forms that the plans
must use and requires the plan to provide a written
response to each grievance. BC reports that it receives
approximately 1.5 million routine consumer calls per month.
According to BC, roughly 25 percent of those inquiries
involve an issue that would meet the bill's definition of
grievance, even though they could be resolved quickly, over
the phone, or in a follow-up call. BC maintains that this
bill would require that it treat all of these calls as a
formal grievance. As such, BC would then be required to
send each enrollee a grievance letter explaining the
reasons for its response, even though the matter may have
been resolved. By forcing the plans to address routine
calls through the formal grievance process, BC asserts that
the truly egregious complaints would get lost in a "sea of
routine matters."
DLW:kb 4/18/01 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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